Google launches Open Handset Alliance

Martin Garner
07 Nov 2007

In an announcement Monday that was long on promise, but short on detail, Google and 33 partners announced the Open Handset Alliance.

This is a group of players working together to bring mobile devices, applications and services to market using Google's new mobile device software, named Android.

According to the announcers, the alliance shares a common goal of fostering innovation on mobile devices and giving consumers a better user experience than much of what is available on today's mobile platforms.

Eric Schmidt, CEO of Google said he was not announcing a Google Phone but that Our vision is that the powerful platform we are unveiling will power thousands of different mobile phone models

The timing of this announcement was good. Thanks largely to Apple, there's still a strong air of "let's re-invent the mobile phone industry", and OHA resonates nicely.

Google has been vocal on its frustration with the messy, fragmented world of mobile phone software. And it has a point. The fact that - 13 months after Google bought YouTube - most of the world's users would need to buy a new phone if they wanted to watch a YouTube video while mobile is an embarrassment for an industry that prides itself on selling smart phones.

Android is an attempt to clear that up by offering a powerful, open platform that attracts a critical mass of developers and quickly provides better devices, applications and services than its rivals.

Android is an ambitious move. Not only to develop an entire new software stack for all sorts of devices, but also to carry a large part of the industry with it in order to get it accepted. And not just accepted - Android needs a big market share to make it worthwhile for any of the players.

Especially so for Google, which appears to be carrying significant development and management costs. There was little mention of how Google will make money here.

The payback will not come from cost savings on current mobile initiatives, at least not until Android has a large market share. It will not come from licensing fees for use of the platform, since it is free of charge. But it is expected to come from expanding the advertising market.

That's fine, but it's worth remembering that the hardware spec for phones to run Android means that it won't exist below the mid-range for some time and, as such, it will mostly reach people who already use both the internet and Google. So, this is more about winning a bigger share of their attention than it is about really expanding the market. For the latter, they are betting on 2-3 years of Moore's Law to enable future low end phones to run this type of software (assuming no software growth meantime). So this is a long-term bet, as we have also seen with Google Gears and OpenSocial.

Google shareholders should ask themselves whether Google's aims of reducing software fragmentation, improving browsers and expanding the advertising market are best addressed with Android, or with lesser moves (like developing a new browser). They should also ask why Android should succeed.

After all, the telecoms landscape is littered with failed or wobbly alliances and overlapping initiatives. Most of the players in OHA have plenty of first-hand experience in this.

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