I was recently asked to voice my opinion on whether Google would succeed with their mobile strategy, and to identify any roadblocks Google – or other new entrants.  What are the most significant problems to be solved given user’s needs? What are the vulnerabilities in incumbents’ strategies that a new entrant might exploit? I do think Google is on to a good start. However, with mobile devices, it usually comes down to a few things:  Do the phones look cool and are they easy to use?

In terms of looks, few will claim the Razr was a brilliant phone that was easy to use. But the look of it was amazing when it first came out, sparking lots of copy cats and resulting in an astounding success for Motorola at the time. With Android, the first G1 devices certainly fit neither criteria of cool looking and easy to use, and their “success” is arguably that they appeal to the early adopters – the smartphoniacs which was a brilliant terms coined by the WSJ this week.

However, this is changing quickly. The HTC Hero looks stunning on the outside and the UI also looks great (yes, I would have bought one in a second if it had a keyboard which is my main requirement), and several other handset manufacturers will likely put out cool looking phones.

This brings it to the second area, usability, which is far more difficult to get right.  Not only does the phone itself has to be easy to use (and look good) – but the services around have to as well.  I think Google is doing the right thing by being open and allowing for good UI implementations like HTC did with the hero (but failed with the G1). Where I am not so convinced though, is with the services that are being built around the phones – i.e. “iTunes vs everything else”.  There seems to be a “Field of Dreams” mentality in place in the industry, that all you need to do is to build an appstore, and users will come. I do not subscribe to this at all (which I have previously talked about in AppStore Schmappstore).

Apple’s AppStore works because iTunes is incredibly well designed and they had a huge base of users to pull from – who also happened to have their credit cards registered.  This is where most players still do not do it right: Provide for a great user experience on device AND web, along with an easy billing option. I am quite disappointed with Nokia’s Ovi store both on device and on web when you compare it to the current ideal which is iTunes, and their music application on PC was so buggy and slow I had to remove it (and I am not the only one disappointed with Ovi).  Although I do not want to put a detailed Ovi vs iTunes analysis here, looking at the picture below is kind of comparing Wholefoods with Aldi.

What is surprising is that Google has ignored building a web based AppStore which I simply do not get, because they certainly have people within the organization that understand mobile. I guess they are hoping for other players to do it, but this seems like a dangerous strategy.

And then you have the magic missing piece, which seems to be so easily ignored: Billing.  Billing through premium SMS is still screwed up as a business model as carriers are too greedy in their revenue shares, putting brakes on the development of a healthy eco system.  Credit card is not ideal as a platform – unless you already have a large installed base of users (like iTunes had prior to launching the AppStore), perhaps because of a natural reluctance to whip it out for micro transactions.  While free apps certainly drive traffic and does not require billing, you need to offer paid apps to attract good content providers.  Mobile Marketer recently pointed out that apps have really appeared as a main selling point, and that you “developer support as much as an ingenious user experience, will make or break these high-end device offerings”. While I agree apps are certainly important and a selling point, it is certainly third on the list after cool looks and a great user experience (of course, good app offerings are part of the user experience), and I have no doubt Google will manage to attract good apps and app developers in the long run.

So these are some frictions that have really been around for quite some time. Funny enough, Apple has openly shown the world that if you provide a good business model and billing, along with a great user experience – good things happen. This could have easily be copied by other players (except for the installed base part), but current attempts seem to be a long ways away.