Is the Open Handset Alliance that Google recently announced the beginning of a new wave of innovation or is it just tilting at windmills? Andy Lippman made a good case for the former on Tom Ashbrook's NPR talk show, On Point, making the analogy to television business, where TV sets can be connected to any channel, not just the one that supplied the set, enabling lots of companies to become developers of new wireless services.
George Colony took a more pessimistic view at the Future Forward conference last week, saying that Google was going against the fundamental business model of the cellular business. Forrester CIO George Orlov later elaborated that while T-Mobile has joined the alliance, its coverage isn't as good as Verizon or AT&T. Unless it could make the trillion dollar investment to expand its network, the majority of customers would continue to patronize the bigger operators, and those operators would have little incentive to open their networks.
While it's too early to call - the first handsets won't be available until next year - I think there are two reasons to be optimistic. First, T-Mobile (and perhaps Sprint) are hungry enough to try something new and may demonstrate that the market for mobile data will grow much more rapidly when a new wave of innovative applications are allowed to flourish. Selling lots of data that enables third-party applications could be more lucrative than trying to own 100% of the data and applications business. Secondly, the rest of the world is not like the US. If other countries continue to pull ahead in wireless applications, it will become obvious that restricting users to a handful of applications determined around a conference table in Bedminster, NJ is inferior to letting the marketplace decide.