Google's CEO talks NFC, mobile payments and Android fragmentation at Web 2.0 Summit

Google Inc.’s CEO Eric Schmidt gave a wide ranging interview at the Web 2.0 Summit 2010 in San Francisco this week, but he spent most of the time talking about mobile. While showing off a “Nexus S” device, Schmidt offered some thoughts on near field communication (NFC), which he announced will be available in the coming weeks in Android’s “Gingerbread” update with support for the reader and writer functions.
Like many in this space, including the carriers, Schmidt believes mobile payments could eventually replace credit cards.
“The theory of the case is that you’ll be able to walk into stores and do commerce. They’ll be able to find out who you are, with permission and all those kind of things of course,” Schmidt continued.
“I don’t think people understood how much more opwerful these mobile devices were giong to be than the desktop,” he added. “This is a really good day for mobile”
To perhaps allay fears, Schmidt made it clear that Google sees itself as a technology provider in the NFC space and that its not trying to directly compete with payment processors, for example.
“My guess is that there will be 500 new startups in the mobile payments space,” he added. “It’s likely to drive a very large mobile business.”
When asked about his biggest regrets with Android and it’s plans going forward, Schmidt talked about apps.
“The next real focus is at the applications layer,” he said. “I would have liked to put more emphasis on the applications layer earlier.”
But he also explained reasons why that wasn’t the early push. “You have to establish volume first,” he said. “It’s fundamentally about the math of a platform.”
As for the iPhone, which he called “the sort of historic leader in the space,” Schmidt gave Apple Inc. kudos for a “set of things that the iPhone really did a brilliant job of bringing out in a closed system.”
However, to be sure, “the Android model is different than the Apple model… Google made a bet in its founding … on open systems,” he said. As such, Google is more open and willing to let carriers set pricing and various business models, he added.
Some of Schmidt’s most interesting comments came up over the issue of privacy.
“There is clearly a line that we should not cross. Classic example is face recognition … There are many, many such examples where the technology will allow real-time tracking,” he said. “These are examples of a line that we do not cross.”
He added: “What we have learned is that people disagree on where that line is and it’s not Google’s role to answer that question.”
Society will be confronting many uncomfortable questions around privacy and Schmidt expects the debate to get much worse before it gets worked out.