Sometimes, vaporware condenses into the real deal.
We've been writing about Google's
Well, now the mainstream media is getting in on the fun. This morning's Wall Street Journal reports that Google plans to make the Gphone gossip official within the next two weeks, citing "people familiar with the matter" as a source.
Google has supposedly been making the rounds with handset makers to square away the hardware, and it's leaning toward Deutsche Telekom's
It's easy to see why Google would want in on the market. As newer phones seamlessly integrate Web-surfing features, Google doesn't want a browser titan like Microsoft
Google applications are already incorporated in several popular handsets. Apple's
That's nice, but Google would rather establish direct relationships with its users. After all, information is a search engine's favorite food. The better it knows you, the easier it is for Google to anticipate your needs and -- oh, right -- serve up targeted ads.
The whole "ad-supported model" has fueled speculatation that Gphone won't cost a dime to use, but that's just not realistic. What carrier would side with Gphone if such a deal would eat into its paying subscribers? Revenue-sharing is lucrative, but not that lucrative.
By the same token, if Google plans to deliver local ads through its phone, what's the allure of going with an unproven Google? It's not like Apple, where the iPhone was a convergence appliance to help consolidate iPods with handsets. No one will want to pay market prices for a phone -- no matter how spiffy and feature-laden -- if it interrupts their calls with sponsored pitches.
The reality will probably fall somewhere in the middle. Calling plan rates may run at mainstream prices, but Web usage beyond that will be subsidized -- at least partly -- through Google ad consumption.
The balance has to be right if Google wants to win both user and carrier support. At the end of the day, there might not be a proper balance at all.
Hooray for Gphone
So who will win with the Gphone? Google, of course. The company is now selling more than $4 billion in online advertising every quarter. Much of that comes from small advertisers trying to drum up local leads, and the Gphone will be the perfect handshake enabler.
On the other side of town and need a dry cleaner, pronto? Your favorite Thai restaurant is closed, but you still have a craving for a bowl of tom yum soup? Google's there with a pair of gloves and a cash register to make it happen.
If the Gphone is a hit, the carrier and handset maker (or makers) will also be rewarded. As long as it doesn't cannibalize conventional business, the Gphone may work out as well for T-Mobile as the iPhone will for AT&T
Boo for Gphone
As for the losers here, well, isn't that pretty much everyone else? Google isn't going to expand the size of the cell phone market. Gphone users will simply be defecting from existing plans.
The carnage won't end there, of course. GPS functionality is a given, to make the most of Google's local search prowess. GPS-device makers like Garmin
Then again, handing out prizes and raspberries -- or in Research In Motion's
We don't know whether this will be a cool "must have" communications device that will displace the iPhone or BlackBerry.
We don't know much, quite frankly. That's why Fools should remember that the real deal can also sometimes revert into vaporware.
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