The Nightmare Haunting Google's Android Dream

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

It's only just been released, but expectations are already high, and early reviews are glowing. Google's (Nasdaq: GOOG  ) first Android-based phone -- the Dream from HTC -- made its debut today on Deutsche Telekom's (NYSE: DT  ) T-Mobile USA. Apparently, advance interest has been huge as consumers are eager to snap up the open platform device.

But while some kudos are warranted even before a wide population tests the offering, I'm a little concerned about displaced opinions and comparisons that many investors seem to hold. Most scary to me is that some investors still seem to think that Google is a device maker and that the phone should be compared to Apple's (Nasdaq: AAPL  ) iPhone or Nokia's (NYSE: NOK  ) smartphone lineup to gauge its success.

The handset market and the application market that Google is going after are very different, and success in each area comes in completely different ways. More importantly, the factors in making a piece of hardware a success don't necessarily translate into similar levels of high-margin revenue from scalable applications. If you could crack open Apple's books to see the revenue from iPhones compared to the revenue from iTunes downloads I imagine this would become very apparent.

The other aspect of the Android that could deliver some investors a rude awakening is that it will likely be a niche product for much longer than many expect. Niche is certainly not bad when you're talking even of numerous Android deployments that could be floating around by next year. But it's a far cry from the mainstream, where the ubiquity offers brand scale that leads to significant revenue.

Consider that Motorola (NYSE: MOT  ) scored big with the RAZR not just because early adopters went nuts over the device, but because even wirelessly-challenged individuals gravitated to the sleek design that was also easy to use. And though Research In Motion (Nasdaq: RIMM  ) has persuaded millions to learn how to email from a mobile device, that only took, umm ... about a decade.

It will take Google time to migrate mainstream user interest from the desktop to mobile as well. While competition from Verizon (NYSE: VZ  ) and others also haunt Google's mobile applications ambitions, it is the retraining generations of phone users that will be the hard part.

For more ghoulish Foolishness:

Apple is one of many game-changing companies picked by the Motley Fool Stock Advisor service. To see all the stocks that have helped Tom and David Gardner beat the market by 32 points on average, take a free 30-day trial.

Fool contributor Dave Mock uses applications on his phone, but it's still a sub-par experience. He owns shares of Motorola. Nokia is an Inside Value selection. Google is a Rule Breakers pick. Apple is a Stock Advisor recommendation. The Fool's disclosure policy does have many striking similarities to the Borg.

Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 760345, ~/Articles/ArticleHandler.aspx, 10/23/2016 2:13:02 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
GOOGL $824.06 Up +2.43 +0.30%
Alphabet (A shares… CAPS Rating: *****
AAPL $116.60 Down -0.46 -0.39%
Apple CAPS Rating: ****
BBRY $7.37 Down -0.11 -1.47%
BlackBerry CAPS Rating: *
DT.DL $11.83 Down +0.00 +0.00%
Deutsche Telekom A… CAPS Rating: ***
MSI $73.62 Up +0.05 +0.07%
Motorola Solutions CAPS Rating: ***
NOK $4.92 Down -0.08 -1.60%
Nokia CAPS Rating: **
VZ $48.20 Down -0.94 -1.91%
Verizon Communicat… CAPS Rating: ****