Free mobile phones

A lot of our business development managers based in various parts of the world have started to trek home for their Christmas holidays. I recently chatted with my San Francisco colleague and learned that he was able to attend the Web 2.0 conference last month. This is just the premier event of, for and about the leading figures and companies driving innovation in the Internet economy. One can get a lead on what business models are working, what’s next on the horizon, and how all this will affect your own business. Indeed, a great fringe benefit of a USA posting where a chance to attend conferences such as this and hear the gurus of the technology world make their fearless forecasts comes regularly.

During the same event, he caught an interview of Google’s CEO Eric Schmidt in which he proclaimed that mobile phones should be given away for free. Whoa! A statement like this coming from the CEO of the $105-billion darling of the technology world deserves some serious attention. Schmidt explained to his audience that as advertising on the mobile phone becomes more prevalent, this should eventually drive the handset cost to almost zero as the accompanying subsidies increase. This would be similar to how the cost of a newspaper slowly came down as advertising spending by brands increased. What a concept, indeed, but this may become the case everywhere else, except the Philippines.

Schmidt further explained that as it is today, mobile subscribers are so attached to their handsets and cannot leave home without them, so with their wallet or keys. He foresaw a future where consumers would be issued free mobile phones if they would be willing to accept and watch targeted advertising. But, of course, such targeted advertising is to be provided by Google through its new mobile search service called Adwords. It was briefly described as working in two ways. The first way would be to imbed two lines of text with a limit of 12 or 18 characters per line on every Google mobile search result; this is currently on beta in the UK, Germany and US. The second would be to deliver text, brand image and video ads onto the small screen of mobile phones; this is now showing much success in Japan where phone TV viewing and shopping are more advanced. Simply amazing! A new battlefield has been created on the mobile frontier and there are tons of cash to be made. I am buying some Google stock! A Merry Christmas and a more Prosperous New Year to all!

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Patrick R. Garcia is the managing director of Bidshot Wireless Services. For comments or suggestions, e-mail [email protected].