Monday, November 24, 2008

Google Phone -- Google Computer -- Netbook Computer

Some Netbook computers are breaking the $300 price barrier. Dell has announced that it will produce a computer that uses "TV white space". Google is elated.

Google makes its money from advertising. It does not make telephones or computers. According to one of Google's founders, the advent of "white space Internet" will increase Google's advertising revenues by 30%!

The lowest priced Netbook computers do not have hard drives or Windows software. They are designed to be Internet appliances. For those who use Gmail and other Google hosted products, who needs a hard drive? Who needs windows?

In a year or two, the $100 price barrier might be broken and white space transmissions might be available free of charge. When price falls, growth occurs. In a few years, school kids will carry a 2 pound $100 compact Netbook computer instead of a 50 pound sack of text books. They will have access to the whole world of knowledge.

This Christmas Season, a lot of $500 to $1,500 laptops will be purchased. Many of the buyers will never do more than what they could do with a $300 Netbooks. The public is not very aware of Netbooks yet. Business people who have them tend to use them as a second, ultra portable computer. The day is approaching when people have extra computers sitting around, like they now have extra calculators.

I can see a Netbook based on Google Android Software in the making. These machine will have the ability to use cell telephone connections if necessary but they will default to white space or WiFi connections. Because the cell phone providers will share in the advertising revenues, carriers will offer machines that assist the customer in reducing his cell phone minutes.

The promise of having the Internet everywhere has been made by WiMax and other "long distance" proponents for years. In numerous markets, the promise is becoming reality. Mobil TV service is sweeping the country.

New 3G Storm phones can be bought for $199 provided one is willing to sign up for a two year data contract at $49 per month. This data plan is unlimited Internet but it includes no regular sell phone service. In other words a working phone will cost a minimum of $69 per month. Add on TV networks for another $15 to $30. A steep price, but a cheap price for those who need mobile access to the Internet. If a service worker saves one trip a month, he is way ahead. The business that learns to substitute Internet for physical movement will be at a competitive advantage.

The $69 price will fall, especially when white space services start cranking up. The key point is that mobile access to the Internet will generate so many advertising dollars that the service can be made available free of charge. One of the hooks that will speed the adoption is access to entire libraries of books. Consumers will pay for the purchase of books but much less than the total cost of the same book in hard copy.

Google shares are available at less than 10 times earnings. The price today is $262. You had better get these while you can, limited supplies are available at that price. I am not a financial analyst, investment advisor or broker, but, as an amateur investor, I see a bargain here.