Nexus One another tactic in Google's ad-revenue strategy
Phone is secondary to mobile-online reach
Computerworld - Dash all the announcements of Google Inc.'s fast new phone, Nexus One, because on Tuesday the search company made conceivably bigger news with its creation of a Google-hosted Web store for purchasing its Android devices.
That innovation could give advertising-based Google the ability to attract about 1 billion mobile-phone buyers from all over the world to its site each year. The site would likely feature ads from third-party vendors selling multimedia content or mobile phone add-on equipment such as headsets, as well as links to Android Market apps, analysts said.
Asked about those advertising-related connections, Andy Rubin, vice president of engineering at Google, made the company's goal clear. "Our primary business is advertising... a superphone [like Nexus One] is a great way to access the Web, and that... supports our whole business model, which is advertising," he said. The new phone and store represent "the next front of our core business," he added.
Google is not trying to make a profit on sales of the Nexus, said Rubin. Instead, it's trying to "make sure we have great access to Google services... and the best possible Web experience," he explained. "You buy this and the advertising model takes off."
Rubin also clarified that it would be "inaccurate to say that Google designed the phone;" instead, he gave credit to mobile phone vendor HTC. Still, it was clear that Google worked on the Android 2.1 operating system used in the Nexus One interface, which includes 3D visual effects and speech-to-text functionality, which allows users to enter content into a text field -- such as a tweet or an e-mail -- by speaking instead of typing.
In the Google Web store Tuesday, Nexus One phones for use on T-Mobile USA's network were available for $179 with a two-year contract. They were also available for $529 unlocked, meaning people could use them on the networks of other GSM carriers.
Google also says there will be a Verizon Wireless CDMA-capable version of Nexus One available sometime in the spring. Anyone with a Gmail account linked to a credit card can purchase any of the devices, Google officials said. So far, only Nexus One is offered, but Google is promising more to come.
The entire purchasing process was explained in a blog post by Mario Queiroz, Google's vice president of product management, who noted that more operators and more devices will soon be added to the new online store.
As an indication of Google's control over the buying process, two T-Mobile representatives on Tuesday said the Nexus One must be purchased from the Google site and cannot be purchased in T-Mobile stores, although T-Mobile's site provides details on the monthly costs of the device. Google confirmed that the T-Mobile version must be purchased from its store, although it is available unlocked, and only committed to T-Mobile.
The $179 T-Mobile version requires a two-year contract of $80 a month for 500 minutes of talk time and unlimited data, or $2,099 over the course of the contract. Theoretically, a $529 unlocked phone using a $60 monthly plan (as T-Mobile offers for some other phones) would cost $2,019 for two years.
The simplicity of purchasing a mobile phone is what caught the eye of some analysts attending Google's event on Tuesday, even more than the 1-GHz Snapdragon processor and other features in the touchscreen Nexus One.
"Today was really less about the Nexus One phone and more about the retail model Google has for selling phones," said Ken Dulaney, an analyst at Gartner Inc. While Dulaney said he liked the Nexus One's hardware and software design, he called the announcement "a gauntlet thrown down to Amazon," the leader in online retail.
Dulaney said Google is "trying to get control of Web-based retailing of phones, but if they get control of this, who knows what happens."
It's likely that Google will support the effort through third-party ads on the phone site, for devices such as Bluetooth headsets that work with the featured phones, or even downloadable content, Dulaney said. For now, he said advertising on the phones shouldn't be too prevalent, adding that "eventually Google will get to that."
If Google's phone store does well, it could affect phone sales at brick-and-mortar retailers, possible leading to consolidation among the thousands of smaller stores operated by wireless carriers, Dulaney predicted.
But he also said it's too early to predict the impact of the business model, with only one Google phone for sale so far. He noted that many of the details are still unclear. For example, Google hasn't named the third-party vendor that will take orders for and mail out the unlocked phones.
Dulaney also predicted that sales of unlocked phones would be strong, although not necessarily in the U.S. "There's a huge demand for unlocked phones all over the world. Google will do well selling them, but the question over time is how well they will do."
Computerworld editor Mike Barton contributed to this story.
Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen, send e-mail to email@example.com or subscribe to Matt's RSS feed .
- Studies show Sprint and T-Mobile need to expand U.S. coverage
- Gear Fit: Samsung strikes again with its 'build one of any device' plan
- Nokia Lumia Icon on sale Feb. 20 exclusively at Verizon
- Samsung hints at new UI for upcoming Galaxy S5
- How 'Lenovorola' changes the mobile world
- Google and Samsung grow cozier with patent deal, Motorola sale
- Should Sprint buy T-Mobile?
- iPhone, Samsung smartphone use by U.S. consumers jumps
- A mobile app reality check
- Verizon LTE getting AWS upgrades, even as execs admit to some performance 'hot spots'
Read more about Mobile/Wireless in Computerworld's Mobile/Wireless Topic Center.
- 15 Non-Certified IT Skills Growing in Demand
- How 19 Tech Titans Target Healthcare
- Twitter Suffering From Growing Pains (and Facebook Comparisons)
- Agile Comes to Data Integration
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- The Critical Role of Support in Your Enterprise Mobility Management Strategy Most business leaders underestimate the importance of tech support when they choose an EMM solution. Here's what to put on your checklist.
- Separating Work and Personal at the Platform Level: How BlackBerry Balance Works BlackBerry® Balance™ separates work from personal on the same mobile device, right at a platform level. Find out how it can work for...
- Protection for Every Enterprise: How BlackBerry Security Works Get an IT-level review of BlackBerry® Security, addressing data leakage protection, certified encryption, containerization and much more.
- Future Focus: What's Coming in Enterprise Mobility Management (EMM) Find out why Enterprise Mobility Management (EMM) solutions that are truly future-ready must be designed to enable Machine-to-Machine (M2M) capabilities and much more.
- Live Webcast On-demand webinar: "Mobility Mayhem: Balancing BYOD with Enterprise Security" Check out this on-demand webinar to hear Sophos senior security expert John Shier deep dive into how BYOD impacts your enterprise security strategy...
- Live Webcast Unmasking the Differences between Consumer and Enterprise File Sync & Share The consumerization of IT combined with the rapid pace of the modern mobile workplace is forcing enterprise IT teams to evaluate file sync...
- Live Webcast Workforce Mobilization for Improved Productivity A mobility research director from Aberdeen discusses reasons for extending legacy applications to mobile devices, and an integration strategist from Attachmate shows how...
- Getting Ready for BlackBerry Enterprise Service 10.2 Find out how BlackBerry® Enterprise Service 10 helps organizations address the full spectrum of EMM challenges, while balancing the needs of both the...
- Containerization Options: How to Choose the Best DLP Solution for Your Organization This webcast outlines a framework for making the right choice when it comes to containerization approaches, along with the pros and cons of... All Mobile/Wireless White Papers | Webcasts