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December 16, 2009

Google's Grand Phone Gambit

By Doug Mohney, Contributing Editor


Yes Virginia, Google (News - Alert) does have its own smartphone in trials, despite my disbelief.. Details are still sketchy, but the company has 'fessed up’ to having its employees 'dogfooding' the device. Since Android phones are almost – figuratively - a dime a dozen these days, the question becomes what does Google hope to accomplish by selling an unlocked phone designed to its uncompromised specifications.

 
Google came out of the closet with a bunch of tweets from company employees followed by a blog post discussing how its employees would have an 'Android dogfood diet' for the holidays; a fancy way of saying its employees would be testing its own products.
 
 Since then, surprise, surprise, various media personages around the Silicon Valley area have seen the device – purportedly called Nexus One - and pictures and videos have magically appeared across the Web, spinning up mobile phone and Android junkies into a frenzy. 
 
According to most reports, what is being passed out to employees is 'unlocked' phone hardware made by HTC (News - Alert) with the latest version of Android, 2.1. The phone is designed to run on a GSM network, so North American users could use it with either AT&T's or T-Mobile's (News - Alert) network.  It also is reported to have a super-fast CPU, a high-resolution OLED touchscreen, and is thinner than an iPhone; no word if it can leap tall buildings in a single bound.
 
Speculation now rages as to what kind of business model ‘The Goog’ will use to get the phones out into the market and how Google might be out to break/reset the existing relationship between U.S. service providers and consumers.   Currently, we poor souls have a limited number of phones to choose from, depending on the whims of the service provider we select. Those phones typically have limited or crippled features when compared to the feature sets European and Asian markets get.  
 
Unlike the rest of the world, we typically buy service for a fixed period with and pay a lower, subsidized price for our handsets. In Asia and Europe, users end up paying full price for the handset hardware but the hardware is 'unlocked' and customers can freely transfer their service from one carrier to another by simply swapping out a GSM SIM card. You've been able to do this in the U.S. with Nokia and other phones, but most folks have been happy with the subsidy model.
 
Google may be trying to facilitate a European style model of paying full price for the hardware and allowing customers to choose whatever carrier they want when they want. This model would dovetail nicely with the company's sustained FCC (News - Alert) lobbying efforts to allow people to use any phone hardware with any service provider network, rather than the 'locked' model preferred by U.S. carriers.  And if you don't like the full-price unlocked model, T-Mobile USA is reportedly going to offer a standard US-style subsidized hardware plan with a two year contract.
 
But we really don't know what Google will do until it actually offers a phone for sale – maybe in January, says the buzz.  And if Google does start selling phones, it will be interesting to see what phone companies, Apple (News - Alert) and Microsoft decide to do in response. Apple will be worried about a threat to the iPhone and Microsoft will be wondering if Windows Mobile even has a future.

Doug Mohney is a contributing editor for TMCnet and a 20-year veteran of the ICT space. To read more of his articles, please visit columnist page.

Edited by Stefania Viscusi


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