Imagine, the end of the traditional wireless voice subscription model? That’s what Google Inc. might bring about if it has its druthers, according to analysts at iSuppli Corp. Instead, an advertising play will rewrite the rules of the $1 trillion wireless industry.
Sure, Google’s been pursuing traditional business models so far, and it’s making money from the Android Market for apps for the Android mobile operating system, and it’s selling its own branded smartphone, the Nexus One. But the Internet giant certainly knows advertising – a full 97 percent of its revenue comes from ads, and iSuppli thinks pursuing a strategy of working with the mobile value chain rather than against it, it can bring that expertise to bear.
“During the past three years, Google has continually targeted the mobile communications industry with a series of initiatives,” said Jagdish Rebello, director and principal analyst at iSuppli, citing its free Wi-Fi network in Mountain View, Calif., the free Android OS, and open-access support.
Like much of the rest of the mobile value chain, Google is seeking to uncover new user behavior patterns and to drive social networking services through the promotion of cloud storage and computing, mobile advertising, and a variety of location-based services. All of the free Google offerings are driving toward this goal.
“While all the facets of this multipronged strategy will not be successful, it is clear that Google is pushing toward the strategy of monetizing mobile search by leveraging its leadership in Internet search with relevant location-based services and mobile advertising,” Rebello said. “iSuppli believes that if the company executes this strategy correctly – by working with and not against the rest of the mobile value chain – the wireless industry will be well positioned to unlock the next trillion dollars of value by the end of this decade.”
Take, for instance, the integration of many of Google’s popular Web-based services and cloud computing/storage applications with the Android OS, as well as the synchronization of a user’s e-mails, contacts, calendar and other information with smart-phone devices.
