Wednesday, January 04, 2006

Om Malik on Broadband : » Google, Making CDMA Faster?

Om reports that Google has filed a patent on a process that helps speed up wireless data exchange over CDMA networks. This is an important event because it shows the work Googleis putting into the wireless arena.

A few of my readers missed the point of my blog about Google Cube Computers. The idea that Google is trying to become a hardware computer firm is totally off base. That is like saying that Microsoft is trying to become an Xbox company or that Gillette is trying to be a razor company. As we know, Gillette sells razors below cost to build a steady market for its blades. Microsoft subsidizes the price of the Xbox to build its market share.

Google could easily contract with AMD, INTC or others to build simple, low cost, wireless, low power internet appliances. AMD is reportedly making such a product for emerging markets. Would it not be worth several bucks per box for these machines to always start on the consumer’s personalized Google home page?

As I have written elsewhere, the price of gold and other metals is out the roof because of the ongoing boom and pending super boom in the sale of handheld electronic devices. Billions of GPS, phones, radios, TV's and computers will be purchased by consumers in the next few years.

Put a combination of AOL's AIM and Google's Google Talk on a cheap portable computer and you have an instantly profitable communications network. Add the availability of GPS, Google Maps, TV, Movies, etc. and who needs much else in the way of communications equipment.

INTC is now making $500,000 worth of electronics equipment per employee per year. The price of the finished products is going down. In due time, the price of a computer is following the path of the pocket calculator. I am one of a relatively few people who paid more than $1,000 each for the first two pocket calculators I purchased. Nineteen sixty-eight seems like a long time ago but in those days we could only dream about what a computer might do; a pocket calculator was a neat trick.

Again, remember this is about the razor blades not the razor. When almost everyone has instant access to data such as how much gas is going for at all the nearby locations, plotted on a convenient map, the savings in time, energy and costs sum to a huge amount.

I have skimmed the 8 page report on Google put out by Piper Jaffery. The company has placed a new price target of $600 on Google.

Needless to say, I love this company. I think the potential growth has only scratched the surface. However, the report of Google Cube Computers is only a rumor. The patent application to make CDMA faster is real. Google has already gone wireless. The wireless devices today are analogous to my first couple of computers that had zero hard drive storage. One had to load and unload data via 5.25 inch floppy disks. We have come a long way and the pace of progress is quickening. Soon there will be little reason not to buy a pocket, internet computer.

Do the Google Gulp, the stock is hard to swallow at these prices but it is good for your financial health!