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BLOG: Google should think before it unloads its Wallet

Jonny Evans | May 14, 2013
Google Google Wallet gave the company a short-lived PR advantage against Apple and the iPhone, that advantage failed to translate into anything of significance whatsoever for most people.

Google has a bad habit -- a terrible one: it leaps before it thinks. That's precisely what's happened in the company's adventures in NFC-based payment systems within Google Wallet. While this gave the company a short-lived PR advantage against Apple [AAPL] and the iPhone, that advantage failed to translate into anything of any significance whatsoever for most human beings on the planet.

Bad habits
It's a Google thing.

The company's haphazard approach to innovation has seen it use its market advantage to launch high-profile services in numerous fields. Each time it does it likely takes the oxygen out the room for the new market segment, driving smaller players out the business as they try to battle the media, online search and discovery advantages of the search giant.

The company is a giant, but a haphazard one. That's why a recent study found the company shuts down one out of every three services it launches. The lumbering monolith the company will eventually become seems to have better luck with services created in-house: but if you get acquired by the company your outcome seem less likely to stand the test of time.

Add to this that when the company prances into a sector competing segment players will see their business plummet. That may simply be an opinion, but be logical: what businesses ever do well in direct competition with one of the world's largest corporations? I doubt there's many, if any.

Then there's the services the company does manage to attract converts to but then shuts down. Google Reader, for example: this service became so popular it starved other solutions from ever achieving their more modest ambitions of market velocity or scale. That's bad for consumers of course, as now Google Reader's set for closure, they are challenged to find a tried and tested alternative they can trust.

That's what happens when an uber-powerful company doesn't think things through.

Google Wallet is empty
The problems with Google Wallet this week saw the leader of that initiativeleave the firm. This reflect a host of challenges Google faces in trying to make NFC-based payment services on mobile phones popular. The company jumped into that pool way before NFC became truly ready for prime time, ignoring a few salient challenges as it skipped into the new sector:

  • Payment systems aren't broken;
  • The lack of NFC-capable terminals;
  • The lack of a cohesive national or international standard for NFC;
  • Beyond technologists, consumers are resistant to NFC;
  • Consumers (quite rightly given Android's track record) don't yet trust mobile networks or device security.

Even Samsung's SVP mobile communications, Hankil Yoon said: "In Korea I think there are tens of millions of NFC devices already in the market. (But) consumers, they don't know how to use it. They don't even know they have something called NFC that they can use for transportation and mobile payment."

 

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