Recently I read an interesting article in the local paper about Google’sÂ entranceÂ into the world of cell phones. Â If you have not already seen the plethora of commercials out there about all the cool stuff the Motorolla Droid cell phone can do then you need to get your head out of the sand and watch some TV. Â Heck, I don’t even have a TV and I have seen tons of commercials advertising this mobile phone aimed to take away some of the iPhone’s market share in the world of high-end smartphones. Â If you think about, cell phones like the iPhone and Droid are the future of not only mobile communications but also the internet and GPS tracking. Â The future goes through the smartphone.
Because of what is at stake here, the advertising has become downright cutthroat when it comes to pointing out the flaws of other phones and aÂ competitor’sÂ cell phone network. Â If there was any doubt about this, then you have to look no farther than the following advert:
The message comes across loud and clear: iPhone = iDon’t ; Droid = iCan. Â Everything about this commercial screams out against iPhone and tries to offer the Droid as an alternative smartphone. Â They even get the same sort of feel that an iPhone commercial tries to give with their choice of music, all of which is used to enforce the message of the mobile phoneÂ commercial that iPhones suck. Â Again, you can clearly see this for yourself by looking atÂ this commercial that has the ubiquitous “iPhone commercial song” in it.
The cell phone wars are upon us, but do we ever stop and let ourselves ask the question, “Why?” Â Why is Google, Apple, Verizon, AT&T, TMobile, and Sprint spending millions upon millions ofÂ dollarsÂ in an effort to come out with the most widely used smartphone andÂ cell phone network?
The answer is money, plain and simple. Â According to David Yoffie*, a professor at the Harvard Business School, Â “The new paradigm is mobile computing and mobility. Â That has the potential to change the economics of the Internet business and to redistribute profits yet again” (as quoted in the San Diego Union Tribune, January 5th, 2010, section C3). Â People like Google and Apple want to corner the smartphone market because if they can do it they have the potential to ‘control’ the way people use their cell phones and the Internet. Â This control is has the potential to make huge profits for whoever is on the cutting edge.
* This is pulled from David Yoffie’s bio page at the Harvard website: Â Professor David B. Yoffie is the Max and Doris Starr Professor of International Business Administration and Senior Associate Dean, Chair,Â Executive Education at Harvard Business School. Â Professor Yoffie’s research and consulting have focused on competitive strategy, technology, and international competition.
Google made their money on the cutting edge of Internet search. Â Their search advertising business, Adsense, makes billions of dollars each and every year. Now they want to be able to ‘control’ mobile phone search and to be the premier ad service for these devices as well. Â From this standpoint, you can see why there is so much fighting going on over cell phones and smartphones.
But what about GPS tracking, where does it fit in?
The answer really has two parts. Â The first is that mobile technology and mobile Internet surfing is enhanced with positioning technology. Â People like to be able to find restaurants that are near their exact location, get instant turn by turn directions from their cell phone, and to be able to surf the web or stream Pandora while riding the bus to work. Â They love the Internet, they love GPS, they love cell phones and they love it when you can combine all three into a seamless user experience.
The second is that ads can be better served when a person’s location is know by the person serving the ads. Â To a certain extent, companies like Google already are able to do this by taking information from a person’s IP address. Â Their rough geographic location is then taken into consideration when serving them the ad. Â For example, a person living in San Diego might get ads relevant to San Diego divorce lawyers when they are on a website that serves Google Adsense and is about divorce law. Â To a certain extent, this enhances a users web viewing experience, improves the click-through rate for the ad unit, and helps Google make some money.
We have already seen how the Palm-Pre is trying to make use of GPS tracking to serve better ads and how this has caused quite a stir in the cell phone and Internet community. Â Hopefully other phone companies are learning from the thrashing that the this phone has been getting and will let users know about how their location information is going to be used and give them clear and easy ways to opt out of this ‘service.’
Either way you look at it, GPS tracking is going to be a huge part of cell phones in the future. Â The only question is who is going to be in the drivers seat of the smartphone era?