zett - 5:37 pm on Nov 6, 2007 (gmt 0)

Let's be honest - it will be very difficult for Google to enter the mobile market.

In the past, carriers have charged Google an arm and a leg to get into the phones services folder. The carriers KNOW that Google will try to capture consumers with the Google brand. And that they may lose this fight unless they tighten their grip on the market and charge Google a premium fee (yes, some carriers in Europe are said to have admitted Google services into their networks for an undisclosed amount).

Google knows that this strategy (i.e. paying carriers to get in) won't work.

So, in their unbelievable arrogance, they declare war on mobile operators by reducing them to "bitpipes", exchangable faceless wireless ISPs without own brand or services. Now, go ask any mobile network operator how they feel about this. And where they see Google. What makes matters worse is that Google does not want to share revenues with the operators, at least not in a way that makes business sense for the operators.

Now, that's the real reason why Google wants an "open handset". It's not targeted at MSFT. It's targeted at the carriers who unfortunately "own" the customer.

So Google need to bypass them. They think that the only way to do this is to get consumers out of the "walled gardens" provided as part of the subsidized mobile phones.

But this will not work - network operators will keep on having a tight grip on the market:

1) Mobile operators provide the phone subsidy. Who goes out to buy an OHA equipped "open" mobile when there is NO SUBSIDY? Would any consumer pay 250 bucks for an OHA phone with a few nice Google apps on it? When they can get the same phone for $1 without the Google stuff? Erm, yes. Noone will buy such a phone. Now, Google -despite all their money- will probably not do a handset subsidy; it's not their core business, and it is quite expensive, too. How many ads need to be clicked in order to recover a $250 subsidy? Many. The handset manufacturers won't do a handset subsidy. They want to sell a device. So why would consumers line up to buy an expensive phone then?

2) Operators have their QA departments and very very tight rules on which phones are allowed to use their networks. Thus you can pretty much forget about a really "open handset" that is as open as, say, Linux. Perhaps an OHA phone may allow you to change parts of the O/S, but certainly not it's core components. Just forget about that. Will not happen. -- And still this is a very powerful instrument. Carriers may just shut down any connections from phones that are not approved by them. Now, would you buy a phone that does not work in your network? No, I won't do either.

In short - this will be very very difficult to bring to life.