In an article in the NY Times today there is an article entitled Is Google Voice a Threat to AT&T? by David Pogue which recounts the battle between Google voice apps and the Apple/AT&T combo. I refer you to a White Paper I wrote almost two years ago entitled Electronic Marketing and Distribution Channels: Is This How Google is to Make Money? where I stated that Google could and it appears has developed a strategy to utilize multiple electronic marketing and distribution channels to "sell" their products.
Apparently Pogue has not gotten that far in his thinking. Let me state a few facts:
1. Phone calls qua phone calls are almost free. You generally no longer pay per call or per minute. You pay a fixed fee for access to the network. The fee bears no relationship to usage. It is purely an access fee.
2. Money is made by selling the apps. Cellular phones now make money via apps and not via connectivity for voice service.
3. Apps will be the future of the old telecom business, and the telecom company will become the shopping mall operator of the apps access.
If Pogue understood this then he would have a better insight to the issue. Why should AT&T be fearful of disintermediation by Google on a voice service. It really does nothing to what should be their business model. Yet AT&T is still in the dark ages. Verizon recognizes the change and Verizon has positioned its mobile business to maximize that opportunity.
The future of the mobile industry, and perhaps fiber as well, will be as the electronic shopping mall of the future. The mall operator can control the look of the mall and the types of retailers who are present. As I stated in the White Paper:
"Many years ago when I was at Warner Cable, we had developed a two-way full motion video-on-demand system, which we wanted to deploy on the cable system. It was in our minds an electronic Shopping Mall. It built upon the already existing two-way system, which had been deployed, called Qube. That was in 1981. This was before, I suspect, 50% or more of the Google staff were born. As part of my efforts to obtain customers I went with our group directly to the potential suppliers of goods and one of them was the owner of Foley’s, a major department store in Huston. It was a typical hot and humid July day in Huston and we stood outside the store with the owner and watched the people enter, in those days almost all were women. The owner told us to watch for them when they left. We stayed there for several hours and watched as they left, and then owner returned and said, “What did you see?”
My immediate reply was “What should I be looking for?” He then replied’ “The Customers” I saw customers coming out of the store all holding several Foley’s bags, all filled to the brim with Foley’s products. My reply was. “They all bought something.” He then said. “Something, they bought lots, and I would bet that nine out of ten did not buy the thing they came here for in the first place. The lesson, young man, is that to run a store successfully you have to get the customer in and then you have to get them to buy as much as you can before they leave.”
That was a lasting impression."
The real question is what is Google doing to monetize its apps? They still are the one trick pony despite Eric Schmidt's assertions to the contrary. In our White Paper we stated two years ago:
"The paradigm we have used for Google is that of the shopping mall operator. They get to bring the customers to the mall and then they get to share in the profits. However, if we combine the Localism construct as well we then get the paradigm inverted. Namely, instead of the mall being where we bring the customers to the supplies, in the use of 700 MHz and Localism we get the supplies brought to the customer. This is a dramatic shift in the way the world works, but it is a shift, which is consonant and resonant with the way the world is going. Using broadband wireless, we can now create extensions of the mall, of the classic agora, we no longer need a “place” as defined by real estate but we get a place as defined by the contact, connection and experience.
If Google can replicate what they have done with advertising, in the use of wireless broadband then they can replicate the experience in a long term and sustainable manner. This is the redefining moment for Google. This is what would take them from being the “one trick pony” to the unlimited creator of markets."
This is a Foley's type business, albeit not with a brick and mortar store. Pogue does not see or understand this. I saw this thirty years ago, hopefully the techys at Google will see it soon also, before it passes them by.
Apparently Pogue has not gotten that far in his thinking. Let me state a few facts:
1. Phone calls qua phone calls are almost free. You generally no longer pay per call or per minute. You pay a fixed fee for access to the network. The fee bears no relationship to usage. It is purely an access fee.
2. Money is made by selling the apps. Cellular phones now make money via apps and not via connectivity for voice service.
3. Apps will be the future of the old telecom business, and the telecom company will become the shopping mall operator of the apps access.
If Pogue understood this then he would have a better insight to the issue. Why should AT&T be fearful of disintermediation by Google on a voice service. It really does nothing to what should be their business model. Yet AT&T is still in the dark ages. Verizon recognizes the change and Verizon has positioned its mobile business to maximize that opportunity.
The future of the mobile industry, and perhaps fiber as well, will be as the electronic shopping mall of the future. The mall operator can control the look of the mall and the types of retailers who are present. As I stated in the White Paper:
"Many years ago when I was at Warner Cable, we had developed a two-way full motion video-on-demand system, which we wanted to deploy on the cable system. It was in our minds an electronic Shopping Mall. It built upon the already existing two-way system, which had been deployed, called Qube. That was in 1981. This was before, I suspect, 50% or more of the Google staff were born. As part of my efforts to obtain customers I went with our group directly to the potential suppliers of goods and one of them was the owner of Foley’s, a major department store in Huston. It was a typical hot and humid July day in Huston and we stood outside the store with the owner and watched the people enter, in those days almost all were women. The owner told us to watch for them when they left. We stayed there for several hours and watched as they left, and then owner returned and said, “What did you see?”
My immediate reply was “What should I be looking for?” He then replied’ “The Customers” I saw customers coming out of the store all holding several Foley’s bags, all filled to the brim with Foley’s products. My reply was. “They all bought something.” He then said. “Something, they bought lots, and I would bet that nine out of ten did not buy the thing they came here for in the first place. The lesson, young man, is that to run a store successfully you have to get the customer in and then you have to get them to buy as much as you can before they leave.”
That was a lasting impression."
The real question is what is Google doing to monetize its apps? They still are the one trick pony despite Eric Schmidt's assertions to the contrary. In our White Paper we stated two years ago:
"The paradigm we have used for Google is that of the shopping mall operator. They get to bring the customers to the mall and then they get to share in the profits. However, if we combine the Localism construct as well we then get the paradigm inverted. Namely, instead of the mall being where we bring the customers to the supplies, in the use of 700 MHz and Localism we get the supplies brought to the customer. This is a dramatic shift in the way the world works, but it is a shift, which is consonant and resonant with the way the world is going. Using broadband wireless, we can now create extensions of the mall, of the classic agora, we no longer need a “place” as defined by real estate but we get a place as defined by the contact, connection and experience.
If Google can replicate what they have done with advertising, in the use of wireless broadband then they can replicate the experience in a long term and sustainable manner. This is the redefining moment for Google. This is what would take them from being the “one trick pony” to the unlimited creator of markets."
This is a Foley's type business, albeit not with a brick and mortar store. Pogue does not see or understand this. I saw this thirty years ago, hopefully the techys at Google will see it soon also, before it passes them by.
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