Today's release of the G1 handset marks the start of a major new opportunity for Google, and it's less about selling phones than about expanding Google's mobile platform.
The G1 basics: offered by T-Mobile for $179 with a two-year contract, touch-screen, Amazon.com music store access, full keyboard
Walt Mossberg calls it "the first real competitor to the iPhone."
Ahead of the launch, analysts told Bloomberg that the Dream rollout probably won't match the hype surrounding the iPhone, and most analysts expect fewer than 500,000 of the phones to sell over the next three months.
That matters, but only a bit. The real game-changer is the open-source Android platform. The operating system already has lots of programmers at more than 30 Google partners hard at work developing mobile applications, and there could be an opportunity to expand beyond the mobile market, according to CNET.
Collins Stewart analysts are putting a price on Android's contribution—$5 billion in incremental ad revenue by 2011—and a $615 price target on the stock, from $438 today.
Here are five reasons why Collins Stewart thinks the mobile market could be bigger than the PC one for Google:
1) Installed base of mobile devices. The installed base of mobile handsets is 3bn+, making it 3x bigger than the installed base of PCs.
2) Ubiquity. Mobile devices remain with users 24/7, making it more ubiquitous than PCs.
3) Better targeting. The demographic information of mobile users is known, making the targeting more effective
4) Location knowledge. A mobile device allows advertisers to target users based on their location.
5) More usage and more users. In many countries/regions mobile is the primary way users go to the Internet and in many countries/regions, mobile Internet activities are larger than the PC based Internet activities.
At any rate, it's been an expansive summer for Google. This month marks the firm's 10th anniversary, and it took the opportunity to step up its fight with Apple here, following its foray into the browser market—Microsoft territory—with the speedy Google Chrome just a few weeks ago.