Google Inc. is taking a page from Apple Inc., launching its own branded mobile phone this week – the first of many, apparently. But it’s also shaking up the accepted mobile delivery model by launching its own consumer electronics-type storefront for the gadget, in theory wresting away control from the carriers.
Google execs were quick to point out at Tuesday’s launch event that Google did not design the phone – HTC did. It is instead, it said, acting as a merchandising agent with a new online channel for buying Android-based handsets using a Google Checkout account. The Nexus One is the first to be marketed this way, and it will soon be joined by other phones from other manufacturers, like Motorola Inc.
Unlike the Apple Store’s domestic AT&T Inc. exclusive with the iPhone, Google’s Web-based storefront offers consumers the HTC-built Nexus One with or without carrier service. An unlocked phone will cost $529, but it’s also available with a T-Mobile USA contract for $179. Google’s further staying true to its open access mantra by making it available with either Verizon Wireless or Vodafone plc this spring, with other carriers on the way. The unlocked version can run on any GSM network, but because of the frequencies supported within the phone, on AT&T it will run on EDGE, not 3G.
While taking the mobile phone business out of the exclusive realm and into more of an open consumer marketplace offers significant changes for the carrier delivery model – and perceived ownership of the customer – the import for Google is also worth noting. It’s not about the hardware margin, executives explained, meaning that the objective is not to take on giants like Apple or Microsoft in the form factor game. That dovetails with Google’s insistence that it is leaving that to the manufacturers. The gadget – and those to follow – is rather a Trojan horse of sorts: Google’s No. 1 priority is to get people online, wherever they are, which of course would translate to more online advertising and Web app and search revenue for the Internet juggernaut.
Further true to the Google roots, and in sharp contrast to the blitz from Verizon around the Motorola Droid, the marketing for the Nexus One will be done solely online, and will leverage the Android market.
