Google smart not to challenge Apple for iPhone

As Brian White wrote earlier, Google Inc. (NASDAQ:GOOG) officially claimed it is not entering the direct cell phone business. It's a smart decision for Google. It is not used to being the secondary player in any business it engages in. Possible partnerships with carriers is a more sensible route if Google does enter the phone business. Google is an online company, providing online service, and not a physical company with hard, touch and feel products.

Apple Inc. (NASDAQ:AAPL), on the other hand, is a touch and feel company and would be an extremely formidable foe if Google decided to go "hard-line." Apple has two major advantages and will exploit them to the max: the iPod and the Mac as well as the retail store outlets.

The cell phone business is a retail, physical, touch and feel business. Consumers want to hold that phone and play with a phone's features before buying a certain model. The iPhone will be a mega success due to the retail store system that Apple has brilliantly developed. With 173 stores in strategic locations around the world, Apple will pick all the low-hanging fruit with the iPhone in the first quarter it is available. Google's business model has not encountered any physical products and this could prove to be uncharted waters for it.

Setting up carrier relationships using Google technology may be a wise business decision, but at the end of the day, the customer still wants to test that phone before buying.

It's Apple's game to control and win...

Georges Yared is the author of "Stop Losing Money Today" and "Baby Boomer Investing". Please visit www.georgesyared.com