The GPhone

As I have said before, Nokia’s biggest competitor in the future may be Google.  If Nokia doesn’t offer value added services and software on its phones, Google, Yahoo, and Microsoft will.  In a world of shrinking margins on handset hardware sales, finding every valuable cent per user per ad or selling services for monthyl revenue is incredibly important.  Where is Motorola in all of this?  Take a look at this article and excerpt from the Wall Street Journal about the pending Google phone:

Now it is drafting specifications for phones that can display all of Google’s mobile applications at their best, and it is developing new software to run on them. The company is conducting much of the development work at a facility in Boston, and is working on a sophisticated new Web browser for cellphones, people familiar with the plans say.

The prize for Google: the potential to broker ads on the mobile phones, complementing the huge ad business it has built online. Google even envisions a phone service one day that is free of monthly subscription charges and supported entirely through ad revenue, people familiar with the matter say.

I’d say Nokia is still in pole position right now – the stock is up 7.7% after it sold 100mm handsets in Q2.

"Though sales grew more slowly in mobile phones (+1 percent), and much faster in multimedia (+42 percent) and enterprise (+94 percent) than we expected, margins were way ahead in each case," he wrote.

Notice the phenomenal growth in the multimedia division – that is where the n-series phones, many with wifi and other computer-like capabilities are situated. This is also the division that will reap the many benfits of their software/Internet services acquisitions like Twango and Gate5.

Published by Ed Sim

founder boldstart ventures, over 20 years experience seeding and leading first rounds in enterprise startups, @boldstartvc, googlization of IT, SaaS 3.0, security, smart data; cherish family time + enjoy lacrosse + hockey