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Google, Android, Nexus One: Phone Business Change? None!

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A few weeks ago I had some harsh words for David Pogue. Dave, The New York Times’ lead technology columnist—among other things—had expressed an opinion about copy protection that I felt was so out of touch with reality he needed to be called on it.

Pogue didn’t like my opinion. He told me so. Well, David . . . this time I’m with you: today, Pogue comments on Google and their new Nexus One cell phone. And I’m happy to report that he’s back in the fold as “the voice of reason”.

Over the last few months, and especially the last couple of weeks, the hype for Nexus One has been in full overdrive. Without every saying so officially, Google had let us know that they were about to release a new, super-feature-rich phone that you can buy without a contract. And they’ve done exactly that. The Nexus One is very, very cool, leap-frogging even my beloved Droid in a few areas (while falling short in a few others).

And that’s it. Business Change from the Nexus One? Very close to zero.

My disappointment with what Google has done stems not from my feelings about the device itself; I’ll repeat that the Nexus One is a great SmartPhone. But let’s be clear: while it’s theoretically true that you could just buy the phone and then 1) get service from the carrier of your choice and 2) get that service at a lower cost , the reality is that differences in the way cell carriers move calls and data around means that the only place you can get service for the Nexus One is T-Mobile. Yes, you could use AT&T instead, but then your data would be too slow.

Oh, and by the way: if you buy your Nexus One from T-Mobile, on contract, you’ll pay about the same thing that AT&T gets for an iPhone and Verizon gets for a Droid. And if you buy a Nexus One without a contract it costs . . . you guessed it . . . pretty much what AT&T and Verizon’s flagship phones cost without a contract.

Overall, this makes the Nexus One announcement a non-event in my book. So why write about it?

Because this is the very first time that Google has hyped/announced/released something that qualified as nothing more than a me-too. Love them or hate them, Google pushes the envelope on everything they do, and the Nexus One is not business change, phone change, power-to-the-people, or anything else, other than Google wanting very much to usurp Microsoft and Apple in the phone operating system wars.

I concede, Google; Android is spectacular. The Nexus One is a great Android phone; I almost want to replace my Droid. But . . . really, when you tell the world you’re going to change business, you need to actually bring some business change to the table. The Nexus One is no such thing.

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2 Comments

  1. I think you’re right about the me too aspect, and Google was called on that during their press event on January 5th.

    But I think you’re wrong about the upswing of a Nexus One and paying full price — T-Mobile is already much, much cheaper for data and voice plans, but when you switch to a contractless arrangement with them, your monthly cost goes down about another $20.

    True, T-Mobile has been pushing this for a while and not just with Google — it works the same way with a MyTouch3G, a BlackBerry, a Cliq, and even the off brand handsets.

    So although Google hasn’t innovated this aspect of the Nexus One, people who buy one wihout a contract certainly benefit from it.

    In the long run, I think that Google pushing their phone and getting great buzz for a great phone and OS with great price incentives for consumers not to opt for the subsidized phone might open things up.

    What if your contract’s up with Verizon and the Nexus One is available only contract through them, but without one on T-Mobile? What if Verizon has to offer it without a contract, but doesn’t reduce their monthly fees when you pay for the phone outright?

    People will start seeing the difference of carrier get bigger just as the T-Mobile network gets better and faster.

    • Gib, I hear you. And you’re right that there is a $20 or so per month savings on T-Mobile over the other guys, which works out to $480 over two years. And don’t get me wrong; I’ll take $500 any time someone offers it to me.

      On the other hand (and man, I do appreciate when people are straight like you were!) Google and the Nexus One didn’t make that discount; it was already there in the T-Mobile business model.

      Yes, it’s possible that if enough people buy the Nexus One and use T-Mobile that the price of service from the other guys could get pushed down. And yes, we can give Google, Android, and Nexus One some of the credit for that if it happens. But that’s pure speculation.

      What I think would have been really cool, given that we now know what it costs to make the Nexus One (just a bit less than the on-contract price) is if Google had made it an IP-only device. They could have done that and used Google Voice to assign phone numbers. They could have sold it for $200 without contract and given it away on contract, used no carrier at all, and made their money . . . later. That would have been real business change, and I can’t figure out why they didn’t go that way.

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