The Gphone and Mobile Local Search

The Wall Street Journal reports today that we could be getting closer to the realization of the long-rumored Google phone. This could happen in one (or both) of two ways for Google: partner or build.

Partnering has been Google’s angle into mobile search and services thus far, but it has only allowed it to push through watered down versions of its products such as Gmail for mobile and Maps for mobile. Having its own device would allow it to position itself more predominantly on the home screen, and build applications that are more compelling than carriers have been willing or able to do themselves.

Even if it has its own device however, partnering would require the perennial challenge of working with carriers who are famously unwilling to cede control over every facet of their network and every device that runs on it. Talks so far have only resulted in Verizon scoffing at the search revenue share that Google is asking for in prospective mobile search advertising.

Gphone and iPhone: Catalysts for Change?

This defeatist position on the part of U.S. carriers has been the number one detriment to mobile local search innovation and application development. But the web browsing capabilities of the iPhone could finally be the avenue by which search application developers can sidestep the carrier control over the home screens of devices that run on their networks.

A phone from Google could do the same, if the company pushes its weight around enough, to appeal to carriers with an enticement of brand appeal and revenue boosting possibilities for data consumption, amidst hyper competition and falling revenues in the mobile voice arena. This is similar to how Apple got in bed with AT&T.

The iPhone will soon become compelling enough that other carriers will have to adopt (post-AT&T 2 year contract), despite worries over enabling a device that has wi-fi capability, an elegant browsing experience and other things that could allow consumers to sidestep consumption of carrier voice packets (wi-fi enabled VoIP is one concern here).

The same thing will happen with a prospective Google phone; carriers will come around out of necessity to compete. Give it time.

Go it Alone?

Google’s other possible direction is to go out and buy it’s own wireless spectrum – something it has indicated it would like to do at an upcoming government auction for a swath of open spectrum. This would take years to build and cost billions (I heard Google has some money though); and could land Google in a position, like the carriers, where it is forced to protect a massive investment.

On the bright side, this would essentially make Google its own carrier, with a direct channel to offer consumers all of the things that it has wanted to for years. In the meantime, partnering with carriers is still possible. Carriers will try, unsuccessfully, to block Google’s overall forays into the mobile environment, but it will eventually enable it by partnering with the company out of short term competitive necessity.

Either way, we can finally expect to see meaningful innovation in the mobile local search arena. The Gphone itself is rumored to be free to consumers and completely ad supported, which could invoke a welcome sea change in the mobile telecom world.

Combine this with the iPhone’s effect on stimulating mobile local search innovation and application development; and pervasive mobile local search and location based services could be here before we know it.

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