There has been lots of chatter about Google's gift of the Nexus One to it's staff. This is normal practice for smart companies in the mobile space - what better way to get feedback on early, experimental products and services than have your own staff use the early releases.
There has been much chatter about whether Google will go the next step and make the Nexus One available directly to the public. There is already an established mobile brand that has taken this step - Nokia. Unfortunately for Nokia it seems like consumers don't have that much demand for directly purchasing phones - Nokia's flagship stores are being closed.
The challenge for both Google and Nokia here is that they are both in the business of selling a product that consumers consider to be free - in Google's case search and applications are offered free to the consumer and subsidised by advertising revenues, in Nokia's case phones are offered free to the consumer and subsidised by network operator subscriptions.
As the music and media industries have seen there is often a big change in the demand for products when the move from free to paid. Evidence from some music services suggest that the fall in demand once you ask consumers to pay for something may be as much as 80%.
So Nokia and Google face the same challenge - how do they offer something that consumers currently get for free in a way that makes consumers prepared to pay for it?
One distraction in mobile is the word mobile - while most actual use of phones is in two locations - home and work. So creating compelling services that consumers will pay for has to offer some benefits in those two locations.
The mobile phone has succeeded at this in the past - some examples
Voice calls - consumers are used to having access to alternative forms of voice calling at both home and work - yet the convenience of integrated address books in mobile phones have succeeded in capturing more and more voice call revenue from landlines.
Text messaging - the ubiquity of SMS based text messaging captured huge new markets even when large numbers of people also had email and PC's with far better keyboards for text entry.
For me there is a new example National Rail Enquiries even though there are multiple ways I can get hold of this information - either phone, or websites, I choose to use the iPhone application, even when at my desk. The simplicity and focus of the application helps me get what I want done straight away.
The challenge for Google and Nokia engineers is thus to answer this question What services would you choose to use from your mobile phone while you are sat in front of your PC? The winners will be able to show examples of more phone usage - not just mobile, but every minute of the day.
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