The Google Phone will be free
UPDATE: It seems I was wrong, but not before others picked up on this idea. As it turns out, the Google Nexus One isn't nearly as disruptive as a VOIP-driven, ad-supported device could be. I still maintain that the below is possible, and hopefully we'll see it one day soon.
This isn't specific to film, but considering mobile devices today are much more than just phones -- they're connected computers that serve as our digital, personal assistants -- this has bearing on how all of us will be interacting with each other (and content) in the future. So I thought I'd throw around some unqualified and totally speculative speculation about What's Next when it comes to mobile platforms.
Lots of talk today about Chrome OS, the forthcoming operating system from Google. It's a browser- and cloud-based operating system, and it's definitely on its way. But yesterday the buzz was all about the forthcoming/not coming Google Phone, which everyone seems to disagree on. TechCrunch claimed it exists, despite Google's assertion that they wouldn't release their own phone and cannibalize sales by hardware partners (Motorola, Samsung, et al). Indeed, it's hard to believe Google would develop their own device when they already have a strong hand in developing said hardware, as they reportedly did with the Motorola Droid (of which I'm a current user). But then TechCrunch speculated that the Gphone may not be a traditional cellular phone but rather a mobile VoIP device that uses Google Voice (similar to Skype) to handle all calling. Now their assertion starts to make sense, as Google Voice is already a game-changing application on Google's mobile OS, Android (which is different from Chrome). On my Droid, I'm already using Google Voice to send SMS messages for free, bypassing the carrier's ridiculous $20/month messaging charge ($30/month for data is understandable, but text messages are just that -- data -- and infinitesimally small bits at that, making the additional fee downright offensive). In Android, you can select what to use Google Voice for -- all calls, international calls, or not at all. Say you turn it on for "all calls." Now when you place a call you're not even using your carrier's voice network.
See where this is going? Text messages are data. Calls can be treated as data. TechCrunch's assertion that it'll be a data-only device is convincing. But it seems unlikely Google would make their own hardware, right? They're a web services company, and no matter how smart their engineers and programmers are, they'd have no reason to jump into the personal electronics game, where margins are razor-thin and companies are foundering by the dozens. As more and more smartphones hit the market, the hardware will become commodified; a high resolution screen, multitouch, and decent speaker will get the job done. Android's touch keyboard in landscape mode is the same thing as the iPhone's, and it works fine; the iPhone's competitors are catching up to the iPhone and the iPhone itself isn't innovating as much either (from a hardware standpoint, the 3GS was just a faster 3G).
Google wouldn't jump into the hardware game to build a better device (they already work with manufacturers on that) or to try to create something to compete at the iPhone's price point. The reason Google would jump into the hardware game is to manufacturer something cheaply to give away for free.
If Google's basic business model is, "give people something they want, charge nothing, and make money via targeted advertising," then the mobile phone is the final frontier. Instead of web advertising motivating users to click on a hyperlink, mobile advertising gets someone to walk into a physical store. If you're walking down the street and you search for Pizza, the results you get could be paid for. When you Google something in your browser today, this is already the case; there are the algorithm results, and then there are the Sponsored Links. Each time you click on a link, the advertiser pays Google. In the case of mobile search, when you find a store using Google Maps and then physically walk into that store, the GPS in your phone can report that as an acquisition; the store would then pay Google for the added foot traffic.
I'm not entirely convinced that Google will "make" their own phone (I say "make" because even if they do, it'd likely just be an unbranded Toshiba/Samsung/LG device). With Chrome their plan is to allow hardware partners to produce their own variants of Google's reference designs; if they're not going to build their own netbook, why would they build their own phone? If they did release a phone themselves, they'd have to have an ulterior motive. They could build a simple, straightforward, free device, make a billion in order to get costs as low as possible, and release it worldwide, all in the name of collecting obscene amounts of user data along the way. But they're going to do this anyway with Android and Chrome and all their web apps, without giving away a piece of loss-leading hardware.
More likely is the possibility of a Google Plan as a free, lower-bandwidth alternative to plans from Verizon and AT&T. People worry far too much about the price of the device itself, as if the difference between plunking down $100 and $200 at the store means anything when you're contractually signing away $2,400 on the spot (a two year contract at $100/month). Based on that knowledge, carriers subsidize the price of a device as long as you sign their hefty contract; seen this way, many phones today are already "free." Therefore, it's not the the device that matters. It's the service. And it's going to be free.
The money Google brings in from mobile advertising (they just purchased mobile ad provider AdMob for $750 million) will more than cover any data charges they will subsidize a carrier (this was probably why they bid $4.6 billion on that 700mHz spectrum). You won't have a monthly bill. You'll just have a free device that does everything.
Of course, the phone will be reporting your whereabouts and activities to Google Mothership, and this raises all sorts of privacy concerns, etc. etc. But Google already scrapes data from much of our lives anyway, especially those of us who use Android or Gmail or Gmaps. What's a little more personal info, when it comes down to it? Privacy ain't free.