There is a huge amount of interest in the lowly cellphone, why, because a 960M of them were sold last year. The majority of them were so-called feature and entry-level phones. Only 50M or so were smartphones, the category that Google and Apple are planning to dominate by leveraging their ubiquitous branding and user interface (UI) skills. So what exactly are Google and Apple planning?
There has been a great deal of speculation in the blogosphere about the nature of the upcoming Google Phone: http://blogs.business2.com/apple/2007/03/photo_is_this_t.html and http://www.engadget.com/2007/03/15/google-exec-confirms-phone-in-the-labs/. Much of what is being discussed is nonsense. Here are my predictions:
Apple: Enough has been written on the iPhone's features but not on Apple's strategic moves. The most important is Apple sees the necessity of partnering with wireless carriers. This partnership is unlike the relationship other handset vendors have with carriers. Nokia, Motorola, Samsung and other handset vendors do develop new handset concepts but in the end they customise "standard" handsets to carrier specifications. Apple's iPhone is more akin to RIM where the carrier is a distribution channel for a standard iPhone handset. As far as the iPhone's two differentiated features: a touchscreen and voicemail integration, these remind of the Apple Newton, Steve Jobs' invention of the PDA category. It was not a huge success and I am betting that the iPhone will not be a huge success. It is very hard to change user behavior and the telephone keypad and Qwerty keyboard have been around for over 30 years. Nonetheless I hope the iPhone makes me a convert to touchscreens.
Google: Google's business model is slightly different for their Google phone. Google has spent more than $50M to acquire companies (i.e. Android) and software licenses to create a handset operating system (OS) that I believe Google intends to offer handset manufacturers for free (essentially open source like Linux). Just like most PC users enter the internet via Google's home page, Google's intention is to have cellphone users do the same by making their handset OS ubiquitous. So far HTC is running the Google OS on a handset but I believe many other handset ODMs will follow. In this business model the handset ODMs will offer the Google Phone to carriers for distribution.
Microsoft: Microsoft is about the release Windows Mobile 6.0. When I was CEO of Kinetic we developed the first Windows Mobile (then called Windows CE) vehicle computer using version 2.0. We were on the bleeding edge and soon discovered that Microsoft had no idea how to develop an embedded OS nor understood user behavior for mobile phones. Microsoft's strategy of connecting Windows Mobile to Windows Office appeals to large enterprises but I'm certain they will lose out in the consumer market. I was urging Microsoft's Windows CE product managers to focus on the enterprise market back in 1999 but they felt that market was too small. Just deserts--Microsoft sold just 10M Windows Mobile OSs in 2006.
Nokia: Nokia's wholly owned OS subsidiary Symbian is more ubiquitous than any of the other smartphone OSs as it dominates the high end of the feature phone market. My prediction is that Symbian will soon be used only in Nokia handsets. I also believe that it will be the big loser in the smartphone OS battles.
Motorola: Motorola is betting on all the above OSs including embedded Linux but not Symbian. They will eventually become like Dell, dependent on TI (equivalent to Intel in the PC world) and OS vendors.