Move aside iPhone here come the Android

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Nov 06 2007
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The way Google move along its roadmap (I assumed they have one) is simply fantastic. The company is one of the rare species that do not give earnings guidance and this could be the reason for its success. Probably Google itself couldn’t measure how far the company will jump in every coming quarter and the subsequent thereafter. Earlier decision in YouTube and DoubleClick’s acquisition might be seen as a way to monopolize the online advertising, however the killer-move did not arrive until the recent official announcement.

The long rumor of Google going into the cell phones territory is confirmed. For decades mobile phone industry are being segregated among the major players without a common platform. With the announcement of the creation of the Open Handset Alliance that will pull a group of 34 companies together to create a free package to run a cell-phone, Google Inc. (Nasdaq: GOOG, stock) might have hit the next jackpot after it’s flagship Google Search Engine. The free package is essentially a complete set of software required to run a cell phone – Linux-based operating system, a Web browser, applications including maps, e-mail, video-sharing and viewing tools.

Google Android PhoneThe alliance includes chipmakers Intel Corporation (Nasdaq: INTC, stock) and QUALCOMM Inc. (Nasdaq: QCOM, stock), handset maker Motorola (NYSE: MOT, stock), wireless carriers T-Mobile and Sprint Nextel and e-commerce provider eBay Inc. (Nasdaq: EBAY, stock). The new phone will be known as Android and is seen as having the potential to give Microsoft Corp and Nokia Corporation (NYSE: NOK, stock) a run for their money. Perhaps the success factor is the proposition to introduce a toolkit that will let independent programmers build mobile software and services for Android-based cell phones.

And the good news for developers is that they don’t pay a penny for licensing. Instead the developers will be able to sell their applications through a Google-created online marketplace without sharing revenues with the search giant. Google will make money on the advertisement served through the phone’s browser. On the other hand, existing wireless handset makers and carriers will be allowed to use the software platform free of charge. In fact handset makers are hoping to cut the 10% off their costs which they currently pay to use Symbian or Microsoft as part of the licensing fees. So its win-win propositions for everyone.

Just how does Google think of the success factors of this project? Andy Rubin, head of the Android project at Google, hopes that within five years, “hundreds of millions” of Android-based phones will be sold per year. This might be a dream but make it cheap and simple enough and consumers might just love it. But with hundreds of millions of cell phone users, the ready market is too huge to be ignored and if things go well, Google’s fortune could just double or triple. So, are we seeing Google stock price above $1,000 a share?

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