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Tuesday, November 06, 2007

Google's phone platform... how large is its addressable market?

I posted a few early comments on the Open Handset Alliance yesterday.


One thing that isn't immediately obvious is whether how much of the total handset market is serviced by the strategy of new OS + Google Apps + advertising + openness + maybe a direct subsidy from Google.

In particular.... will the model work for the majority of the planet's mobile users who have prepay phones, often bought from non-operator channels? And who are often anonymous, and don't have data plans?

There seems to be lots of very US-centric rhetoric from the company & innumerable observers about how this will 'break the strangehold of the carriers'.... which conveniently ignores the fact that that's certainly not true for the overall handset market anyway. Globally, it's about 50/50 sold through operator vs. non-0perator channels.

It's very easy to be seduced by big numbers in mobile - 3bn users, 1bn phones shipped and so on. But generally most of the smartphone propositions I see actually have a theoretical addressable market that is, at most, 30% of that figure.

Now, 30% of 1bn is still a big number... but when you take out about 100m Symbian devices per year, plus a bunch of other platforms used by the licencees, I'll take a wild punt that G-phone shipments will struggle to top 20m by 2010.

3 comments:

David H. Deans said...

Dean, perhaps the Google strategy is focused on the U.S. market because that's still the largest under-developed market for mobile VAS in the world.

If Google offers a viable alternative to the handicapped walled-garden offerings of the major service providers, then this action would be a disruptive event.

I believe that there's pent-up demand for mobile VAS in the U.S. that's awaiting appropriately segmented offerings.

An truly open platform that encourages innovation would theoretically enable new Apps that are effectively targeted a niche markets -- as an alternative to the current one-size-fits-all service offerings (that fit nobody in particular).

Martin said...

Dean,

I am a bit puzzled how people think an open mobile platform can remove walled gardens!? Walled gardens are in place not because the mobile OS is closed but because this is the operators business model. Opening the mobile platform will not change the operator attitude. Fortunately most operators have quite an open attitude these days or at least a semi-open one ;-)

Let's see how the development platform looks like, what kind of hardware will be available and for how much. If this equation is right then a strong brand that pushes the product might help getting the software and hardware into the right hands and into networks which are already open.

Cheers,
Martin

Anonymous said...

Dean,

why not - as Google do this: IMS handset from the network perspective and Google SDK from the device application perspective. Bingo! Everyone happy!