Google's Nexus One - Game Changer But How?

There has been much speculation over the last few months regarding Google’s plans for their branded smart phone. Rumours have turned to ‘leaks’ and there is strong indication that the pricing models will not be that disruptive after all. At a time when many analysts agree that the ingredients to support rapid growth in mobile enabled services are largely in place, an entry by a player such as Google will most definitely change the game for many of the industries existing players.

Business As Usual?
Operators and hand set manufacturers who feared the worst need not worry after all. It is business as usual, or is it?

Google’s planned purchase of Admob (announced at the end of 2009) signalled their belief that the size and potential of the mobile value added services market is relevant and of interest to them, that they intend to take a large slice and do it quickly.

The AdMob purchase, if it goes through to completion, will provide Google with a huge and immediate presence in the mobile internet marketing space to which no doubt they will add their own internet marketing technology and know-how. Launching their own handset /mobile operating system is the quickest way of gaining traction in the mobile apps and services space dominated by Symbian driven handsets. This does depend on the growing army of Android app developers to add value to Google’s proposition in much the same way that the iPhone app developers have done for Apple but it will happen.

For Google, these initiatives are simply a natural extension of what they have been doing since their inception, proving information access tools to the masses as well as a platform for vendors to promote their products and services. It just so happens that the “masses” are going mobile and so too must Google.

Market Growth Will Reduce The Impact On Existing Players
However Google take their slice it will be at the cost of existing players or combinations of players who despite being involved in this space from the outset did not innovate sufficiently with either technology or business models to become truly entrenched.

Luckily, the market for smart phones and mobile enabled services is growing. For those that do loose out to the Google / HTC combination in the short-term it might not be too painful and they might even have a chance to regroup and innovate.

Looking Ahead - Reconfiguring The Value Chain
The market for mobile services outside of voice calls is still in its infancy. There is a long way to go. Google’s entry on the mobile scene is not nearly as important as the impact that they will have on business models as the industry gains clarity over what works and what does not and as value chains become reconfigured to better support innovation in technology and services to provide consumers with what they want, relevant, affordable services.