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Comments: 330 +- Mobile: Less Than Free on Tuesday November 17, @08:35PM
Posted
by
kdawson
on Tuesday November 17, @08:35PM
from the fine-price-point dept.
from the fine-price-point dept.
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VC Bill Gurley has up an insightful piece on the strategy behind Google's releasing turn-by-turn mapping for free. He calls it the "Less Than Free" business model, and it is beyond disruptive. On the day that Google announced its new service, the stock in the two companies that had controlled the market for map data, Garmin and TomTom, dropped by 16% and 21%, respectively. (Those companies had bought Google's erstwhile map-data suppliers, Tele Atlas and NavTeq, in 2007.) "When I asked a mobile industry veteran why carriers were so willing to dance with Google, a company they once feared, he suggested that Google was the 'lesser of two evils.' With Blackberry and iPhone grabbing more and more subs, the carriers were losing control of the customer UI... With Android, carriers could re-claim their customer 'deck.' Additionally, because Google has created an open source version of Android, carriers believe they have an 'out' if they part ways with Google in the future. I then asked my friend, 'So why would they ever use the Google (non open source) license version?' ... Here was the big punch line — because Google will give you ad splits on search if you use that version! That's right; Google will pay you to use their mobile OS. I like to call this the 'less than free' business model. This is a remarkable card to play. Because of its dominance in search, Google has ad rates that blow away the competition. To compete at an equally 'less than free' price point, Symbian or Windows Mobile would need to subsidize." Gurley speculates that the company may broaden "less than free" to include the Google Chrome OS.
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So let me get this straight... (Score:5, Insightful)
Re:So let me get this straight... (Score:5, Funny)
And get paid for it! Don't forget that bit!
Yeah, sound sucky doesn't it? I had hoped that we were starting to see the end of "this feature crippled by your carrier, instead here's a button that'll take you to our website (and charge you for that)".
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Less than freedom (Score:5, Funny)
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Google isn't going to force carriers to do things a particular way. They've created an operating system that's fairly easy to root and take over, so even the most stringent anti-customer policies will be broken pretty easily, just because of the OS. I pity the companies that waste development budget on trying to lock their phones down from now on, it's only going to get easier and easier to break out. My phone already has a completely automated, well-maintained 3rd-party OS distribution called CyanogenMo
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Thank God we have Google to defend the end-users' interests.
Seriously, is there anything that Google can't provide? Maybe they should run everything!
Of course they should. And so should everyone else who wants to try to compete with them.
The great evil here, consider, is that Goolge offered phone vendors a share of search ad profits. Mind you, they also offer YOU a share of their search ad profits, and anyone else that wants to embed their search box on their Web page, device or what-have-you. So do other search engines.
As far as I can tell, this is a plain reading of modern free-services business models from Google and just about everyone else, but to
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Unfortunately, a lot of this comes down to hardware support from cellphone manufacturers. Maemo 5 is open-source, and looks very very cool... However, the only phone that runs it is the N900, which is more of an old-fashion brick than a real cell phone.
I prefer Maemo, because I like to program in Qt4, rather than Java, and there are real advantages to a cell phone that runs Xorg, However, Android has momentum that I think is now unstoppable. If you want to hack for fun, go with the N900. If you want a cu
Gee, it's almost like they have a monopoly or some (Score:5, Insightful)
or something...
Let's see, using dominance in one market to establish dominance in another market. Check!
Re:Gee, it's almost like they have a monopoly or s (Score:5, Interesting)
When I first read this I thought about IBM back in the day. They could put a small company out of business simply by announcing, "Yeah, we're working on that too." And they had to fight off some well-founded lawsuits. Eventually, IBM became known for quiet and consistent R&D (Giant MR comes to mind) because they had to watch what they said.
Will that day come for Google? I think not (or it's a long way off). IBM's issues with the courts came around the same time Ma Bell was dismantled, which couldn't happen now.
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Horseshit. (Score:5, Interesting)
Bing is a joke, Yahoo is for 12 year-olds. If the other giants actually innovated instead of rehashing and hyping to death the same tired shit, maybe we'd have some real competition.
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Re:Horseshit. (Score:4, Funny)
Bing is not a joke.
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The Japanese sure seem to like Yahoo! Maybe Yahoo is the only search engine that does not deliver insane search results when searhing in Japanese??? Anyone with experience that can clarify why Yahoo is big in the Japanese market?
Any search redirects to tentacle porn?
Re:Horseshit. - Hiroshima (Score:5, Funny)
Japanese are comfortable being bombarded.
Too soon?!?
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Re:Gee, it's almost like they have a monopoly or s (Score:5, Insightful)
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Maybe I'm blind (Score:4, Insightful)
I fail to see the harm. In order for this sort of thing to be illegal, some user somewhere has to come to actual harm somewhere. Instead of paying through the nose for navigation information (much of which is already public knowledge), people get it provided by advertising sponsors like they get their free TV. There's room for free TV and cable also. As long as the other providers provide a premium experience and content, they'll be fine.
Should they fail to provide a premium experience and content, they'll lose customers. Isn't that what's supposed to happen?
In the article he points out that Google wanted to do some things with the data that they didn't want to let Google do. They told Google no. In the old world, where the buyer of that data had no choice that would have been the end of the story. But now, apparently Google has the resources to build their own data and publish it however they like - they're not held hostage by the vendor of their information.
It seems fair to me that if Google takes the trouble to drive a car through and photograph every major intersection in the country, index it against their map, address and aerial photographs, they ought to be able to publish that data any way they like.
In a world where we have monopoly after monopoly leveraging their power to prevent progress, here we have a powerful company leveraging its tremendous market power to cause progress to occur. I think that's fabulous.
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Re:Gee, it's almost like they have a monopoly or s (Score:5, Insightful)
you are very happy to point out that MS is convicted for abuse of a monopoly position, which is true, but please try not to make it complete fud-style.
First of all, having a monopoly is legal. Nothing wrong with that.
Secondly, MS got only convicted way after becoming a monopoly, AND abusing that position to work themselves into other market. Your comment makes it sound like it's the other way around.
Google can be argued to have a dominant position in search and online advertising, whether it qualifies as a monopoly you will have to ask a judge.
This subsidising of an ad-supported operating system imho does reek of abuse of position in one market (on-line advertising) to push out competitors in another market (mobile phone advertising).
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Re:Gee, it's almost like they have a monopoly or s (Score:5, Funny)
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Monopoly (Score:3, Insightful)
Re:Monopoly (Score:5, Insightful)
Ahh, another demand-created "monopoly". I find that concept just fascinating. Apparently in this day and age you can have a monopoly in something even when there are 50 alternatives just because the consumers overwhelmingly choose your product.
I find this concept baffling. There's a low barrier to entry, and if Google raised prices enough advertisers would go elsewhere. If customers didn't like the search engine, they'll go elsewhere.
This isn't what the antitrust laws were designed for, they were designed to prevent abuse of government granted monopolies or monopolies over physically limited (supply side) resources. There's no ethical or rational reason to define a monopoly as "being too successful in your field despite numerous competitors".
When one power company or phone company uses anti-competitive tactics to drive out their competition I'm all for going after their asses, but most applications of antitrust law nowadays are just bullshit crybabyism by competitors.
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Re:Monopoly (Score:4, Interesting)
The world "monopoly" here is being used to mean "market power". This is common usage.
A firm having market power means that the market is broken. Firms abusing market power in one market to create market power in another market is a serious problem.
Whether simply having market power due to lucking out with the network effect is something that anyone should be given shit over is arguable. On the other hand, market power gained through abuse of government regulation is a serious issue that needs to be fixed.
Google's power seems to come mostly from economies of scale, somewhat from network effects, and hardly at all from government regulation.
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Where do you draw the line? (Score:3, Insightful)
Ahh, another demand-created "monopoly". I find that concept just fascinating. Apparently in this day and age you can have a monopoly in something even when there are 50 alternatives just because the consumers overwhelmingly choose your product.
Then how do you, as a matter of law, divide between "good" monopolies that just provide the best service for customers and "bad" monopolies that use armtwisting to get ahead?
What about companies that do both to get ahead in a single market?
What happens when a company gets its lead position in one market the "good" way and then uses its power in that market to leverage its way into another market that it normally wouldn't be able to compete well in?
Because that's what our laws against tying are about. I'm n
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But how is this ANY different from Intel locking AMD out of the OEM market for years? After all, it wasn't like Intel had a product that people hated, hell most folks didn't give a crap WHAT CPU was in their machines as long as it ran their software. They had those catchy jingles, pretty stickers, etc.
Only we geeks and those that watch market news know we could have had a much more competitive landscape if the chips would have been allowed to sink/float on their own merits. Netburst was crap, a total space
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Intel already had a power dominance in the CPU industry (still do... about 51% of all semiconductor profits come form Intel's x86 chip line). The went to their OEMs and said, basically, if you buy this other, competing product, we're going to hurt you. We're going to charge you more for our products, and you may have a problem getting the latest ones. The big reason this was illegal, is the same reason it was possible: Intel is so big, they have monopoly powers. If they didn't, they couldn't strong-arm anyw
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Way to set up the straw-man btw. The concern isn't that Google is using anti-competitive tactics in the search/advertising business. Instead, it is about Google using its dominant position in the search/advertising space to compete in the mobile os space.
Is it really doing that? How does their dominance in search and advertising help them gain dominance in mobile OS? Do users want their search and advertising, but is using Android the only way to get it? No. You can also get Google's search, maps, etc if you buy an iPhone. Any other phone manufacturer is free to give their customers access to Google.
What Google is doing is not leveraging their dominance in the search/ad market to gain dominance elsewhere, they're giving stuff away for free in other markets
More than free? (Score:2)
Wouldn't that be more than free?
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No. You get more, yes. But free doesn't describe what you get, it describes what you pay. And you are paying a negative amount. Therefore it is less than free.
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Mathematically you can - any time someone pays you you are effectively paying them a negative amount. Sure, physically you can't, but when has that ever stopped a slashdotter's argument? :)
That's also the only possible way 'less than free' would make any kind of sense at all. And 'more than free' can't possibly be what's being referred to in this article - I mean, if the price is more than free then the price has some positive value, so you are paying for it.
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Needless to say, when I discovered this, I immediately rang the customer and advised them to check if their bank was still there or not. Then I took two aspirin and lay down for a while.
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Less than Free? (Score:2)
It seems like somebody was desperate to write an anti-google story. He seem to be highly suspicious of the carriers for daring to want to compete with the iPod and the Blackberry; than, he seems to be surprised that Google PAYS people to use the version of the Android OS that Google actually PROFITS from.
There's nothing really nefarious here. It's how it was int
Google is the Foundation (Score:5, Interesting)
The one thing about Google you have to understand is that they employ lots of very smart people: they employ scientists, research graduates, economists, technicians and business people. They have calculated with sheer intelligence all business moves: they know what they need to do to get the best business and business position.
In short, they are the foundation. Eventually they will collect all human knowledge and make the encyclopedia that encompasses all human knowledge... this is just a rouse for the real purpose of Google...
I wonder if they employ psychologists?
Re:Google is the Foundation (Score:5, Informative)
I wonder if they employ psychologists?
They employ multiple psychologists, each specializing in different areas of operation. This can be a huge help when attempting to understand why customers, partners, and employees behave the way they do. Add in the fact that by employing a large number of highly intelligent people, their employee population undoubtedly has a higher than average number of people with certain personality imbalances. It comes with the territory.
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Re:Google is the Foundation (Score:5, Informative)
Searching the jobs site... [google.com]
Your search - analrapist - did not match any data available in our jobs section.
Please edit your search terms and try again.
Damn it... I'm just assuming all the positions are currently occupied...
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FYI Navteq was not aquired by Garmin (Score:5, Informative)
Navteq was aquired by Nokia.
Who, coincidentally, give Ovi Maps away for free (Score:3, Informative)
With all of their phones.
http://europe.nokia.com/explore-services/maps [nokia.com]
http://betalabs.nokia.com/ovi-maps [nokia.com]
Android WILL take over. (Score:5, Informative)
It's only a matter of time before Android takes over top market share for smartphones, the only real question is how long it takes. Now before you start screaming fan boy, bear with me here.
- Android is free
- Android can run on almost any piece of modern hardware, on any carrier (you listening Apple? probably not.)
- Every major carrier and every major smartphone maker either already has an Android phone, or has one in the works
- Being open source, carriers and smartphone makers can customize it as little or as much as they want
- Once smart phone makers are hooked on free, the only reason to dump Android is if there's a better mobile phone operating system out there that's worth the cost. Tough to do considering Android will be constantly approved upon given it's open source. Seriously, why dump Android to pay a per unit license fee when Android can do everything most smartphone users want their phone to do (and more in some cases)?
Some disclaimers apply here:
- No I don't have an Android phone, but yes I've used it enough to be familiar with it (including 2.0).
- I don't think its 100% there yet, but it's not far.
- Apples UI design is definitely better.
I'm sure some will disagree with me, and that's fine. Obviously this is my opinion and a guess. If you're looking for some ammo though, I use a Pre, switched from an iPhone and am pretty darn happy with it.
Re:Android WILL take over. (Score:5, Insightful)
Just sayin'
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Re:Android WILL take over. (Score:5, Insightful)
Aren't those the same arguments used when talking about the superiority of Linux on the desktop, and yet we still have less than 5% market share?
Unlike the desktop, people don't have 20 years' worth of weird old DOS and Windows apps that they 'need' to run on their phones.
Plus I don't believe that Linus is paying companies to install Linux on their PCs yet.
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"- Apples UI design is definitely better."
Yep, well, you just defeated your own argument.
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Well, that and Apple also helped them a lot by suing the majority of OS developers that had anything resembling a GUI, thus eliminating the majority of their competition. It was only a little later Microsoft employed various "anti-competitive" tactics against the remaining systems out there.
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Arguably, Apple has had great success by having a completely closed system which is why the argument that Android will succeed because it is open is such a fallacy in my opinion.
Android may be great, but its implementation is different on every Android phone. Different hardware, different features, different amounts of android functionality. You don't really have a consistent user experience any more than you do with Windows Mobile. Also, I bet that apps will not run the same across the hardware since so
most users aren't aware of how much google knows.. (Score:3, Interesting)
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Stock Prices Falling. (Score:5, Informative)
Please note, kdawson,
The day Google announced the free turn by turn navigation coincided with the day both companies announced corporate losses.
Who's to say how much either news contributed to the stock drops. I can't, and ignoring said fact skews the story. Bad editor, bad, bad.
Borgle. (Score:3, Funny)
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Roger, Roger.
Unsure if it's anti-trust though.
Re:Why does anyone want internet GPS anyway? (Score:5, Insightful)
What am I missing?
You're likely missing the bigger picture.
Eventually google's turn-by-turn will have integrated street view imagery, and probably virtual advertisements on the buildings paid for by those businesses (or their competitors)...
Furthermore, as you pass areas of interest, you'll likely see wikipedia articles and user-generated-content (read: pictures/reviews) pop into view (like Google Earth), and eventually google will own your entire travelling experience.
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Re:Why does anyone want internet GPS anyway? (Score:5, Insightful)
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Re:Why does anyone want internet GPS anyway? (Score:4, Interesting)
Your paper maps only make a difference if you know where you're at when you use them. Aside from that your maps also don't have information about stores, street addresses and the routes that are easiest to use to get you there.
Internet based GPS information is great on a phone since it's taking up no memory/storage and can be updated by the moment for things like traffic flow and road construction.
There is more to GPS than just road maps.
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