30 July 2007

Communications Technology 3

In the last post (CommTech2), we mentioned that the Sprint/Google relationship was about more than just securing finances for the FCC 700 MHz auction. It’s also about posturing for a strategic post-auction situation.

Sprint is a nationwide leader in industrial hardware for mobile networks. They have excellent nationwide coverage thanks to access rights on thousands of antennae towers, regional offices and neighborhood stores. With the advent of WIMAX, that is all you need in order to deliver a high-speed broadband connection to the public.

Beforehand, Wifi needed to have their high-speed connection piggy-back on in-ground cable and then broadcast from millions of in-ground cable hotspots. Now, WIMAX signals with extended range can broadcast and receive from the Sprint towers; and higher bandwidth means that the signal can provide high-speed service to all the people within range.

All Google needs for success with their internet application products is for the mobile public to be connected. Google currently does decent business with the stationary consumer , but mobile high-speed users are who they could really appeal to.

Stationary (primarily home and office) users already routinely use Google’s Search engine, Google Earth and Google Maps. But the stationary consumer aren’t desperately in love with Google Desktop, gmail, google calendar or google chat. Yeah Gmail is really nice in that you get free forwarding, free Pop-ing and that it syncs with your Outlook calendars and contacts, but the stationary consumer already has those things with Outlook, IM, Messenger or other similar programs.

If the FCC supports net-neutrality, mobile users will experience an internet similar to todays high-speed connections and all the Google applications will thrive. Gmail, Google calendar and Google chat will become much more highly desired. Mobile high-speed users will not want to carry around fragile hard drives and expensive processors in bulky handheld devices. Why should they? All they would need is a good touch screen display and an antennae ( and maybe a memory card slot for enough media to last the flight). They can have all their calendars, contacts, and files synced, and when they hit the road, they will have everything available to them on Google servers via Google applications. With Sprint providing a high-speed connection and Google providing quality applications, consumers will choose this option. Plus, the bandwidth will still support other goodies such streaming internet radio, YouTube videos, and even some television broadcasts. And for Sprint, they will no longer need to worry about losing customers to Google Chat and Voice Chat. (skype on the other hand should be pretty scared).

If the FCC does not support Net Neutrality, mobile users will not necessarily choose Google internet applications anymore. It depends on the business relationships between the Service provider and Google. Even Sprint would only favor Google as long as Google was willing to shell out market price for fast-lane data access speeds. Even if Google did pay the necessary money to be top-tiered, the natural oligopoly power of the major service providers would be able to vertically extract the majority of the Google profits. Sure, Google would still have good market share, but not great profits.

This may all seem like a pretty decent characterization of the motivation of some of the major communications technology corporations, but it leaves out a couple of giants. What about Microsoft and Apple? What will be their influence and desired positioning in the community? And also, what will become of the other medium in the short term? Next Posting.

1 comment:

Adam Minick said...

With regard to Google's internet application products, it has been reported in certain online communities that the "Google Groups" application is tantamount to a new-age pyramid scheme.

An economist out of South Florida by the name of Robert Sina has detailed a number of flaws in the program. From the $6.50 fees to the requirement that some users install up to two rooftop antennas, it appears to inflict excessive burdens on the user.