For anyone who follows the mobile industry, today was huge. I’m still digesting the excitement and energy that surrounded Google’s launch of the Nexus One device. While most people have focused on the phone, comparing it to the iPhone and salivating over its features, I don’t see the phone as the centerpiece of the announcement. After digesting the news, here are my takeaways from today’s announcement:
1. Google didn’t launch a phone today, it launched a paradigm shift in the US mobile industry.
Ever since I can remember, phones have been tied to carriers in the US. In other words, carriers were able to differentiate themselves not only on service and pricing but also on the hardware they offered. The carriers worked out deals with the phone manufacturers and provided subsidized models to consumers in return for contract commitments. While great for the carriers, this arrangement did not benefit consumers. Case in point: AT&T’s iPhone exclusivity. The exclusivity has benefited AT&T immensely but has not yielded better phone service for consumers.
The rest of the world operates differently. Phones are typically sold unlocked without carrier contracts. The downside is that the phones are not subsidized by the carrier. Carriers compete on services and price, and the consumers win. I can still remember a trip to Europe in 2007 when I bought a SIM card at a 7-Eleven to plug into my unclocked mobile phone. No contract requirements, no long forms to fill-out. Just grab the SIM card, pay, plug it in, and go. What a concept!
2. It’s an HTC phone, not a Google phone
I still stand by my previous assertion that this is not a Google phone. It is a phone designed and manufactured by HTC, distributed through Google. Just as with the G1, MyTouch and Droid, Google had a significant hand in the specification and design of the phone, but it is not the manufacturer.
Google does not want to be in the manufacturing business. It’s in the software business and wants to make sure that the hardware is capable of showcasing all of the best features of the Android software.
3. Google will be agnostic with respect to carriers and manufacturers
Google is going to be a distributor of Android-based phones. Expect Google to offer the best Android phones from multiple manufacturers and make them available on as many networks as possible. The sales page Google has put up already makes that clear. It not only shows the Nexus One and T-mobile as options but also shows Verizon, the Droid and Vodafone as Android handset/carrier options.
So if it’s not about the phone, why is Google putting all of this effort into redefining the mobile industry in the US and not just playing by the rules like Apple did with the iPhone?
It’s simple – Google makes its money from targeted advertising. In order to target its ads, it needs people to use its tools. With Android, it ties the operating system closely to all of its key properties – Search, Gmail, Maps, Google Voice, etc. Google knows that having more people use Android, means more people will use its tools, resulting in more ad revenue.
Google is taking an active role in the development and distribution of Android phones to make sure they end up in the hands of as many people as possible.
So when you think about Google and the Nexus One, don’t fall into the trap of thinking of it as the Google phone. Google’s thinking about the bigger picture, and this announcement was just another piece of their strategy to be the dominant player in mobile.
By the way, the phone is impressive. I can’t wait to get my hands on one, and here is the obligatory video just in case you haven’t seen the phone and some of its key features in action.