Eric Schmidt: All of Google’s Strategic Initiatives in 2011 are Mobile

In the latest Harvard Business Review, guest contributor Eric Schmidt, CEO of Google, writes about the company’s plans for the coming year, saying “as I think about Google’s strategic initiatives in 2011, I realize they’re all about mobile.” It’s notable that Schmidt didn’t say “mostly,” or “many,” of its initiatives are about mobile – he said “all” of them are.

There are three main fronts where Google’s strategic vision will come into play in 2011, explained Schmidt, one of which is “mobile money.” Yes, the CEO just confirmed Google’s plans for a mobile payments service. And apparently, we’ll see it this year.

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In the article, Schmidt explains that we’ve reached a point where, thanks to geolocation and the power of the phone’s Web browser platform, it’s possible to deliver personalized information to users about “where you are, what you could do there right now, and so forth,” wrote Schmidt, “and to deliver such a service at scale.”

LTE Development

In order to achieve that overarching vision, Google will be focused on three mobile fronts in 2011, the first being the development of high-speed mobile networks. Specifically, Schmidt referred to LTE, a technology which mobile operators have begun to call “4G,” although, technically it does not meet the standard’s requirements in terms of speed. Instead, 4G has been adopted as a marketing term which simply means “faster networks.” Schmidt says that these networks will be 8 to 10 megabits, roughly 10 times faster than what we have today. The new networks will help enable new applications, “mostly entertainment and social,” for modern mobile phones.

The wording of the article almost makes it sound like Google itself would be developing the LTE networks themselves, which is odd. That’s not to say that Google isn’t interested in LTE’s progress for its own ends – for example, Google and Apple are entering in a bidding war for 4G patents which are being auctioned off by Nortel Networks, in the wake of its January 2009 bankruptcy. It is more likely that this is the sort of “development” Google is referring to, not building out network infrastructure. If Google is able to secure these patents, it can incorporate the technology they cover into its mobile operating system Android to offer more powerful applications for things like gaming, communications and social networking. The company that ends up on the losing side of this patent battle will have to pay royalties if it wants to do the same.

Mobile Money

The second front which Schmidt referred to is mobile money. “Phones, as we know, are used as banks in many poorer parts of the world—and modern technology means that their use as financial tools can go much further than that,” he said.

That was the extent of his comment, but it effectively confirmed that not only is Google working on a mobile payments service, but that service is a major area of focus for this year.

We’ve been following Google’s plans in this area, having noted a Google job posting for an NFC (near field communications) expert in January, which appears to be related to the Google mobile payments service. Plus, we connected the dots involving Google’s many initiatives which could be tied together to create this mobile payments platform.

Most recently, the addition of NFC, a short-range, high-frequency technology for data exchange between devices was added to Google’s Android mobile operating system. This technology already lets you scan Google Places window decals for businesses testing Google’s Hotpot program, a Yelp-like local recommendations service. But these are just cogs of a much larger machine. By launch, Google will be able to track the stickers for local places you scanned, your ratings and reviews on Hotpot, and then your actual transactions performed on your Android phone at checkout. It will probably deliver related coupons and discounts too, as Google’s attempted (but failed) acquisition of local couponing service Groupon seems to imply.

Increase Availability of Inexpensive Smartphones

Google’s third major initiative for 2011 is to increase the availability of affordable smartphones worldwide. With Android, this trend is already well underway. There are several Android-based smartphones now available for under $100. And with the launch of Broadcom’s mass-market 3G chipset (BCM2157), phones made with those components can retail for less than $100, even as low as $75.  Plus, chip maker MIPS also just launched Android smartphones with MIPS chips at this year’s Consumer Electronics Show, in order to reach the low-end market. The MIPS phones could retail for under $100, even without a contract.

”We envision literally a billion people getting inexpensive, browser-based touchscreen phones over the next few years,” said Schmidt. “Can you imagine how this will change their awareness of local and global information and their notion of education? And that will be just the start.”

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