A couple days ago we speculated a reputed move by Apple to offer free, ad supported iPhones could force Google into the device business. Yesterday it was reported Google was in fact getting into the device business but with a voice over internet protocol (voip) phone which would access data networks only. Apple’s recent patent filing may have nothing to do with Google’s plans but it’s hard to imagine this is purely coincidental.
Although the move hasn’t been confirmed by Google, the article notes that “the carriers won’t love this,” no doubt because doing so subverts their immense sunken costs in traditional cell networks. Even so, AT&T has supposedly lined up to provide data network access, because if they don’t surely another will. With Google Voice offering phone service over data networks, Google will effectively have a tightly controlled alternative to any other mobile phone, and one that could be given away free if supported by built in advertising – that Google also happens to provide.
Long term, moves like this could render voice networks irrelevant. On the device side, should Apple and Google move toward free, ad supported devices, traditional makers like Motorola will struggle to manufacture hardware at anything approaching a profit, no matter what operating system is used.
