@ChunkaMui just put up a great post in Forbes: Motorola + Sprint = Google’s AT&T, Verizon and Comcast Killer.
Easy to imagine. Now that Google has “gone hardware” and “gone vertical” with the Motorola deal, why not do the same in the mobile operator space? It makes sense.
According to Chunka, this new deal, and the apps on it,
…would destroy the fiction that internet, cellular and cable TV are separate, overlapping industries. In reality, they are now all just applications riding on top of the same platform. It is just that innovation has been slowed because two slices of those applications, phone and TV, are controlled by aging oligopolies.
AT&T and Verizon survive on the fiction that mobile text and voice are not just another form of data, and customers are charged separately (and exorbitantly) for them. They are also constraining mobile data bandwidth and usage, both to charge more and to manage the demand that their aging networks cannot handle.
Comcast, Time Warner Cable and other cable operators still profit from the fact that consumers have to purchase an entire programming package in order to get a few particular slices of content. This stems from the time when cable companies had a distribution oligopoly, and used that advantageous position to require expensive programming bundles. Computers, phones and tablets, of course, are now just alternative TV screens, and the Internet is an alternative distribution mechanism. It is just a matter of time before competitors unbundle content, and offer movies, sports, news and other forms of video entertainment to consumers.
The limiting factor to change has not been the technology but obsolete business models and the lack of competition.
Before Apple and Google came in, the mobile phone business was evolving at a geological pace. I remember sitting in a room, many years back, with Nokia honchos and a bunch of Internet entrepreneurs who had just vetted a bunch of out-there ideas. One of the top Nokia guys threw a wet blanket over the whole meeting when he explained that he knew exactly what new features would be rolled out on new phones going forward two and three years out, and that these had been worked out carefully between Nokia and its “partners” in the mobile operator business. It was like getting briefed on agreements between the Medici Bank and the Vatican in 1450.
Apple blasted through that old market like a volcano, building a big, vertical, open (just enough to invite half a billion apps) market silo that (together with app developers) completely re-defined what a smartphone — and any other handheld device — can do.
But Apple’s space was still a silo, and that was a problem Google wanted to solve as well. So Google went horizontal with Android, making it possible for any hardware maker to build anything on a whole new (mostly) open mobile operating system. As Cory Doctorow put it in this Guardian piece, Android could fail better, and in more ways, than Apple’s iOS.
But the result for Google was the same problem that Linux had with mobile before Android came along: the market plethorized. There were too many different Android hardware targets. While Android still attracted many developers, it also made them address many differences between phones by Samsung, Motorola, HTC and so on. As Henry Blodget put it here,
Android’s biggest weakness thus far has been its fragmentation: The combination of many different versions, plus many different customizations by different hardware providers, has rendered it a common platform in name only. To gain the full power of “ubiquity”–the strategy that Microsoft used to clobber Apple and everyone else in the PC era–Google needs to unify Android. And perhaps owning a hardware company is the only way to do that.
That’s in response to the question, “Is this an acknowledgment that, in smartphones, Apple’s integrated hardware-software solution is superior to the PC model of a common software platform crossing all hardware providers?” Even if it’s not (and I don’t think it is), Google is now in the integrated hardware-software mobile device business. And we can be sure that de-plethorizing Android is what Larry Page’s means when he talks about “supercharging” the Android ecosystem.
So let’s say the scenario that Chunka describes actually plays out — and then some. For example, what if Google buys, builds or rents fat pipes out to Sprint cell sites, and either buys or builds its way into the content delivery network (CDN) business, competing with while also supplying Akamai, Limelight and Level3? Suddenly what used to be TV finishes moving “over the top” of cable and onto the Net. And that’s just one of many other huge possible effects.
What room will be left for WISPs, which may be the last fully independent players out there?
I don’t know the answers. I do know that just the thought of Google buying Sprint will fire up the lawyers and lobbyists for AT&T, Comcast and Verizon.
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