Google I/O – Full Circle

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Gaming will put Google out front in the Digital Life race.

  • Google is holding its annual developer event this week from Wednesday May 15th to Friday May 17th.
  • The focus will be on the developers and tools rather than new hardware, updates and features for the Android and Chrome OSs.
  • However there are a few features and updates that I think will be highly relevant to the outlook for the Google ecosystem.

Gaming

  • First and foremost is the launch of a game center, xBox Live lookalike that will facilitate multiplayer gaming as well as game rankings and achievements on Android.
  • I view this is as the last piece of the jigsaw puzzle because when I look at Digital Life, gaming is the one piece that Google does not have covered.
  • With addition of gaming, Google will have 100% of the Digital Life pie covered meaning that it will be able to collect data on all aspects of its users increasing the value of advertising that it can sell.
  • Furthermore, gaming is a crucial piece of Digital Life as users are still spending around 32% of all their time on a smartphone playing games.
  • Gaming is bigger than social networking (24% of time spent) and hence represents a significant data collection opportunity that Google must address.
  • Having 100% of Digital Life covered puts Google way out front of its competitors with Microsoft in second place with 76% of Digital Life covered.

Google Glass

  • I am also expecting a lot of noise around Google Glass.
  • The one thing that this wearable technology experiment needs is innovative applications.
  • As it exists today Google Glass is a clunky looking, slightly clumsy to use piece of technology that is too expensive for mass market appeal.
  • It feels exactly like smartphones did right before the iPhone showed everyone how cool and wonderful the proposition could be.
  • It is easy to scoff at wearable technology and Google Glass because no one has figured out how it can be both very useful and serious fun.
  • What it needs are innovations that take Google Glass and make it a must have for the mass market.
  • These could easily be third party killer applications that bring Google Glass alive.
  • Google is doing exactly the right thing by encouraging the developer community to write the software to push Google Glass from a geeky toy into a revolutionary innovation.
  • New Nexus tablets and upgrades to Android are frankly incidental events when it comes to strategies for Google to strengthen its grip on the Internet.

RICHARD WINDSOR

Richard is founder, owner of research company, Radio Free Mobile. He has 16 years of experience working in sell side equity research. During his 11 year tenure at Nomura Securities, he focused on the equity coverage of the Global Technology sector.