Google sets its top 2011 priorities right -- on mobile
In a short piece, posted in Harvard Business Review, Google CEO Eric Schmidt lays out three priorities for 2011. I'm not exactly sure when this thing was posted. I saw reference to it today on ReadWriteWeb. Google's three priorities are all about mobile, as they should be.
"First, we must focus on developing the underlying fast networks (generally called LTE)," Schmidt writes. "Second, we must attend to the development of mobile money," he continues. "Third, we want to increase the availability of inexpensive smartphones in the poorest parts of the world."
I will focus on priorities two and three, in part because they're more in Google's control. I'll start with mobile money, which I've written about numerous times. In a September 2010 post I reaffirmed a statement made earlier last year -- that the killer application for mobile will be mobile banking/money. It's not the 300,000 applications available through Apple's App Store. Mobile money is the killer application that will define which mobile platforms will eventually emerge most dominant.
In an early August US State Department presentation, [email protected]: Mobile Money and Financial Inclusion," Maria Otero, Under Secretary of State for Democracy and Global Affairs, observed that about 5 billion of the planet's 7 billion people have cell phones. However, 1.7 billion cell phone users with low incomes do not have bank accounts. Mobile money could change all that.
Mobile money lets cell phone owners store/send/receive money in accounts associated with their handsets, providing banking and payment capabilities. In emerging markets where many people don't otherwise bank, the mobile phone becomes a personal ATM for accessing funds and paying for items. One possible future payment option: Scanning barcodes with the phone's camera. Near Field Communications (NFC) is another.
Mobile banking/money is a truly empowering application, but it's one with great limitations. For now. Mobile banking/money services are fragmented, mainly for reasons related to availability, competition, infrastructure and local financial regulations. Additionally, no major mobile OS developer has incorporated banking/money services into its platform.
Google's commitment to mobile money could be transformative for expanding Android's adoption. Developers and handset manufacturers should take notice -- there's a reason why the Nexus S smartphone has NFC capability. Remember, first the Nexus One and now its S successor is reference design for Google developers and OEMs.
"Phones, as we know, are used as banks in many poorer parts of the world -- and modern technology means that their use as financial tools can go much further than that," Schmidt writes.
Google's third priority relates to the second, by way of empowerment. Already, some handset manufacturers are putting Android on feature phones, not just costlier smartphones. Meanwhile, declining market leader Nokia has rightly focused on making available cheaper smartphones in many emerging markets while bulking up feature phones with more smartphone-like capabilities, like fully-functional Web browsers.
Schmidt's goal is ambitious. "We envision literally a billion people getting inexpensive, browser-based touchscreen phones over the next few years," he writes. "Can you imagine how this will change their awareness of local and global information and their notion of education?"
There are reasons why last week Canalys predicted that Android handset shipments would grow twice as fast as its competitors in 2011, or why Gartner predicts that Android will catch Symbian OS market share within three years. IDC puts Android second, but still two places ahead of Apple's iOS; both firms see Apple bleeding smartphone market share through 2014 (25.8 percent decline through 2014, according to IDC).
Will businesses and consumers bank on Android? Certainly not until there are practical payment systems in place. It's way too early to say. But Google's priorities are sound and remind of Microsoft at the dawn of the PC era, when cofounder Bill Gates sought to put a computer on every desktop.
By the way, if you haven't read my analysis "2011: The Year of Google," please do so. It should be a valuable lens for evaluating Google's holiday 2011 earnings report, which is due after the market closes today.