Android vs. iPhone, Wrong Battle for Google

Yesterday, Google announced the long awaited G1 Android phone. In theory, the G1 should be tremendously successful for Google to leverage its advertising machine to take hold of local search and change the mobile advertising footprint. However, it appears that Google prefers to position the G1 directly against Apple's iPhone. In my view, the G1 does not measure up to the iPhone and will lose that battle.

After many iterations of Smartphones over the past few years, the killer application continues to be voice. Apple apparently has leveraged the popularity of the iPod to enter the Smartphone business. As a result, it is debatable whether Apple has changed the "killer app" paradigm with iTunes. If you believe that iTunes is critical to the success of the iPhone then it is impossible for G1 to directly compete since it doesn't even include a standard headphone jack.

Today, I attended an iBreakfast about Android vs. iPhone from an advertising perspective. The panelist included:

David Berkowitz, 360i.com
Jon Lumerman, EarthQuake Media
Noah Elkin, Steak Digital

At this session I found it interesting that most of the discussion revolved around the "cool" applications that were demonstrated at the G1 announcement press meeting. However, there was limited talk around Google's core advertising competency. In order to make a dent in iPhone sales, the G1 has to achieve considerable sales. The iPhone has sold approximately 2,626,183 units in a year. If we compare those numbers to other mobile devices, we see that the hype around the iPhone is greater than the actual results.

Hype vs. Hard Unit Sales Numbers

Motorola RAZR V3 Series - 27,690,028
Motorola MotoKRZR - 5,306,736
LGVX8300 - 4,688,511
Nokia 6101 - 3,500,265
Motorola V325 - 2,927,648
Nokia 6010 - 2,711,021
LG VX9900 - 2,700,530
Apple iPhone - 2,626,183

Time will tell how the G1 phone will be received by consumers. It has had a rocky start with the developer community who felt somewhat abandoned when Google decided to release its latest software developer kit to finalist only in the Android Developer Challenge. This decision motivated many developers to move to competing platforms.

Here is a side by side comparison.

G1Price - $179 USD vs. iPhone - $199 USD

eMarketer Lowers 2008 Online Ad Spending Forecast

Today, eMarketer lowered its forecast for 2008 Online Ad Spending from $25.9 (USD) to $24.9 (USD). They attribute the lowered estimates to the economy and changing Ad Spending habits. It is noted that the lowered estimates still represent an increase of 17.4% increase over 2007.

Viacom Wants to Litigate not Innovate

As you have probably heard, Viacom is suing Google for $1 Billion (USD). They are claiming that YouTube contains over 150,000 copyrighted video clips that are not authorized for posting. When will media conglomerates learn that it is time to innovate instead of litigate. In the Information Age, information is not sacred. All of the worlds knowledge is just a click away. This includes music and videos. The media establishment has lost this same battle before with music sharing with the likes of Napster. What was the result of all the lawsuits and complaining? Today, music sharing still exists both legitimately and illegitimately. The most legitimate outlet being Apple's iTunes application which is poised to be the number one distributor of music in the United States (both offline and online). As a result, the profit margin for music and video's has eroded significantly and profit for MP3 players has been preserved.

Instead of fighting the inevitable sea of change, media companies such as viacom should be innovative with their intellectual property to preserve profitability in the age of information. Just as Apple has been able to create a product (iPod) that complements todays utility of the world wide web, media conglomerates should use their vast resources to develop similar types of products and services.

Disney appears to have been very proactive with this effort by making television shows on ABC available on its website after their broadcast of television. Perhaps there could be "behind-the-scenes" footage that would only be available on a pay-per-view website. I guarantee there would be customers for such a website in todays celeb gossip hungry society. In the age of information customers demand and will pay for access to information if it is perceived as valuable to a particular target market.

There is plenty of room for innovation especially in today's environment, if Viacom would prefer to litigate then it is likely that other businesses will innovate in their place.