Google’s Nexus One: Think Different or Business as Usual?
Posted 01/05/2010 at 4:10pm
| by J.R. Bookwalter

Today, Google announced the Nexus One, and Google’s vision for the handset is about to shake things up a bit in the mobile technology industry. The question is, what is their battle plan, and will it succeed?
Google’s opening salvo in the smartphone (or is that “superphone” now?) wars was the launch of the free, open source Android operating system just over a year ago. Launched with only one operator (T-Mobile) in one country (the United States), and after months of initial growing pains, Android finally has 20 devices with 59 different operators in 48 countries and 19 languages to brag about,
according to a blog entry today from Mario Queiroz, Google’s VP of Product Management.
The Nexus One is presumably the second front in Google’s smartphone battle plan, as well as being a remarkable change of pace for a company best known for giving away most of its products: They’re actually selling a real, live, non-beta, Google-branded product at long last (never mind the fact that the hardware is actually made by HTC). Does this signal a paradigm shift at Google? Instead of relying on ad revenue and a huge pile of stock market investments, does the company plan to start doing things the old-fashioned way, like everyone else already does?
If you want a Nexus One, for now their brand-new web store is the only place to get it. It’s available today, completely unlocked for $529 or locked to a 500-minute, $80 per month T-Mobile plan for $179 (and coming soon to Verizon in the USA and Vodafone in Europe). It’s interesting to note that buyers of the device are required to have both a free Google account as well as use Google Checkout to make the purchase, so the company isn’t being shy about making this an “all Google” event.
Google is also clearly making an effort to sidestep a lot of the growing pains experienced by mega-popular competitors such as the iPhone, where clever groups of rogue hackers have banded together to free the device from the clutches of both Apple and AT&T by way of jailbreaks and unlock patches. If you can buy the Nexus One already unlocked and use it with an existing SIM card all over the world, suddenly the grey market for such devices vanishes -- anyone who wants it can get it without a lot of teeth-gnashing and paying through the nose.
We’d venture a guess that Apple lost a lot of potential revenue from the iPhone over the last two and a half years to both grey market and eBay sales of unlocked devices, particularly in countries such as Russia or China where the officially sanctioned device actually
costs more than one imported from overseas. As such, the wildly popular device has less of a foothold in those countries, a fact probably not lost upon Google.
However, Google’s “go it alone” approach isn’t all that original: Companies like Nokia have frequently released their boutique smartphones unlocked through their own retail stores, as well as e-tailers such as Amazon.com at the same time they were available cheaper with a subsidy, locked to a specific carrier. In Europe, unlocked devices are more common than the draconian system we Americans are used to, where carriers lure us into lengthy contracts by providing cheap handsets up front. As such, Nokia has had an uphill battle selling expensive, unlocked hardware to a country of consumers used to getting their phones for free (or practically free).
Prior to the Nexus One announcement today, rumors were swirling that perhaps Google was going to do the unthinkable and really shake up the cell phone industry by
giving away the hardware for free, much like they do with their traditional Gmail or Google Docs services. After all, a free, unlocked “superphone” like the Nexus One would certainly have better odds of dethroning Apple’s iPhone than the extremely mixed, middle-of-the-road Android devices we’ve seen thus far -- the notable exception being Motorola’s Droid, which was one of the first to actually show the real potential of the nubile young operating system.
Of course, Google’s announcement wasn’t quite that earth-shattering. However, it does put pressure on competitors like Apple to ditch the long-term, exclusive contracts (particularly with unpopular carriers such as AT&T) and start offering their own handsets unlocked for those who choose to use them wherever they like. Cell phones by their very nature are personal to each user: We customize them with cases, etchings or even paint to make them our very own. Viewed in that light, it doesn’t seem so natural to strap us down for two years to one device -- in Europe, for instance, many handset buyers switch to a new device every year, just carrying their SIM card, phone number and service to whatever they like.
So maybe Google’s Nexus One isn’t the big step many of us were hoping for, but it’s a nice baby step toward a new kind of “think different.” After all, freeing ourselves from years of the chains of carrier oppression isn’t going to happen overnight -- even if you’re a giant like Google.