Underestimating Google can be disastrous

Correction, 1:47 p.m. PDT: This story incorrectly described the Apple iPhone. The iPhone does have GPS capability.

Google's first Android-based phone was announced Tuesday and so far, the response has been mixed.

Some believe it'll be the next big thing in the cell phone business because it adds some basics -- such as a physical keyboard -- that the iPhone is lacking. Others believe the G1 will fall flat on its face because it's not unique and its omissions (Exchange support, for one) will make it lose out in the corporate space. (For a full comparison of the two devices, see "T-Mobile G1 Vs. Apple iPhone 3G.")

I tend to agree on both counts. I think Android could be a major hit in the cell phone space, but the G1 won't be able to stand up to Apple or RIM. It's too underpowered and its obvious omissions tell me T-Mobile and Google rushed it before it was ready.

But Android is an entirely different story. At its core, Android is a platform that has tons of potential. It's not only open (which is probably the best feature), it offers full Google integration, which is a key concept in today's age of Google domination, and its touch-screen capabilities mean Apple isn't the only other major company doing something unique in the market.

But my belief that Android will be a success goes far beyond the product itself. Call me crazy, but I can't think of one reason why anyone would underestimate Google. Countless times, companies have ignored Google and let it slip into a market, only to learn when it's too late that it's the leader.

And while it's easy for Apple and the rest to scoff now, you can bet that that's exactly what Google wants.

Who would have thought that Google would become such a powerhouse in the tech industry? Ask.com certainly didn't think it could happen and neither did Yahoo. AOL must have thought Google was just another flash in the pan. Oh how wrong they were.

And what about Hotmail, Yahoo Mail, and the rest? Certainly Microsoft and Yahoo didn't believe that a product called Gmail would make an impact, right? After all, why would anyone actually want to use an online email application from Google when they can use Outlook on any Windows machine in existence? Nice one, Microsoft.

Speaking of Microsoft, where was it when Google was building its online advertising empire? And why didn't it stop Google in its tracks once the company started bringing Google Docs online to compete with Office? Oh, and what about that whole search thing? Didn't Microsoft see that one coming?

Google has its grips in countless markets in the tech industry. It leads the way in search and advertising, but it's a major player in online productivity apps, mapping solutions, and a slew of other places where the leader was supplanted without much worry. And although it's still struggling with YouTube, we can't forget that Google was the only company that had both the money and vision to acquire that site.

The key to Google's success throughout the years is two-fold: it offered superior products because it understood what customers wanted, but it also capitalized on all its competitors that failed to believe that a company with that crazy name could become a powerhouse in any market.

Oh, how wrong they were.

And now, as Android finally hits store shelves next month, companies in the cell phone industry are making the same mistake. Microsoft claims it isn't worried about Android (we've been down this road before, Microsoft), Apple doesn't see it as a worry, and RIM has practically ignored it. All the while, Sergey and Larry have been forming alliances with companies that will see dozens of Android-based phones hit store shelves over the next few years.

Have any of these companies learned anything? Sure, the search and advertising business is much different that cell phone software, but Google's knowledge about what the consumer wants hasn't changed. Worse, Google's understanding of what the market needs has gotten better over time.

At this point, I don't know if Android will lead the way in the cell phone industry and I have no idea if Google will supplant Apple and the rest or face annihilation. But if I had to put money on the most likely outcome, I wouldn't bet against Google. The company has been right too many times to bet against it.

Apple, RIM, Microsoft, and the rest need to wake up and realize that the G1's success isn't indicative of the future success of Google in the cell phone industry. Android is.

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