Google's mobile movement vs. iPhone
updated 04:20 pm EST, Mon November 5, 2007
Google vs. iPhone
Google's recent announcement regarding the Open Handset Alliance (OHA) is set to increase competition with Apple's iPhone, but won't initially offer any features the iPhone doesn't already provide, according to industry analyst Gene Munster of Piper Jaffray. The Open Handset Alliance consists of Google, T-Mobile, HTC, Motorola, and other companies that aim to develop an open software platform for mobile computing called Android. Apple's iPhone is not a member of the new alliance and will not use the new Android OS, but already offers many of the features -- like full Web browsing functionality -- provided by the new software. As a result, Apple has little need to join the OHA and has little to fear from the competition, according to Munster.
"Google's strategy for its mobile platform is an open one, where the software can be freely modified. Apple's strategy is a closed system (with some 3rd party development in February 2008), but the software is fully controlled by Apple," Munster said. "We believe that Android will give many phone makers their first access to software with full web browsing functionality, which the iPhone already offers; therefore, we believe Apple has little need to join the OHA. "
The new operating system will work with many Android-powered devices and Google will facilitate the software development by releasing a software development kit next week. The first devices are due to ship in the second half of 2008, using Android to deliver new mobile technologies to consumers.
The analyst says he expected Google to partner with one or more handset makers to deploy an operating system based on technology from a company Google acquired in 2005, but did not foresee the sheer number of partners -- in excess of 30 -- Google would bring on board. Munster also expected Google to design the platform in a way that could easily integrate its existing Web services and applications -- like Gmail and Google applications.
The analyst firm reiterates its "Outperform" rating on Apple shares with a $250 price target.
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I am all for the cell phone industry adopting a strategy that will push competition and innovation.
These were sadly lacking in the cell phone business, with most being poor upgrades to poor devices and OS's.
The iPhone has made them think long and hard about what they were doing wrong.