Update: G1 Android phone is only half 'open' with T-Mobile lock-in

Absence of Exchange e-mail limits business capabilities, too

The new T-Mobile G1 wireless phone, announced today by T-Mobile USA, Google Inc. and HTC Corp., generated attention for its use of the open Android platform, but it will be locked to the T-Mobile USA network and it doesn't appear to be heavily focused on business users.

"It appears they have provided an Android phone that is only half open," said Jack Gold, an analyst at J. Gold Associates in Northboro, Mass.

Moreover, the absence of support for Microsoft Exchange e-mail or another robust business-focused e-mail system will limit the G1's usefulness to all but the smallest businesses, Gold added. "You can't use Gmail in the enterprise."

Even T-Mobile conceded the device will be more focused on consumers. "This device will have mass appeal and something for everybody," said Cole Brodman, chief technology and innovation officer at T-Mobile USA in a webcast announcement of the $179 device. Still he quickly added: "We expect it to be more [for the] consumer, not necessarily enterprise, but a lot of enterprise workers will come ... and use it as well."

Brodman defended the locking of the device to T-Mobile's GSM and 3G HSPA networks, noting that a faster 3G network will give G1 applications the "best experience." The phone will function on 2G networks, he said, adding there will be a "good experience on 2G, but the best on Wi-Fi and 3G."

About 16 cities have HSPA service from T-Mobile today, and 22 cities will be on that 3G network by the time of the U.S. launch of the G1 on Oct. 22. About 27 markets will have HSPA service in mid-November, representing 80% of T-Mobile USA's 31 million customers, Brodman said.

The bigger market advantage will be in Europe, where 100 million T-Mobile International customers will have the phone in the first quarter of next year, starting with users in the U.K. in early November, said Christopher Schlaffer, innovation officer at Deutsche Telekom, which owns T-Mobile.

Inevitably, users will compare the G1 to Apple Inc.'s iPhone 3G, which garnered more credibility among business users than its predecessor thanks to new features such as a robust e-mail connection with Microsoft Exchange. But Google's senior director of mobile platforms, Andy Rubin, said that while the G1 will allow users to read Microsoft Word documents and PDFs, it won't support for Exchange.

"It's a good opportunity for third parties" to provide an Exchange application, he noted, adding that the G1 supports Gmail from Google. "Gmail is pretty robust, and you can search e-mail pretty fast with it."

Brodman also said that the G1 does not yet support Skype and will not support iTunes, although it supports the iTunes code and could support it if Apple unlocked the digital rights.

Gold's research includes a recent survey of 290 businesses in North America, which showed that T-Mobile has been a small player with business users, with about 8% those surveyed reporting that they use the carrier. AT&T leads that group, following by Verizon Wireless and Sprint Nextel Corp., Gold said.

Having the phone locked to T-Mobile "is a problem, absolutely," especially for potential business users, Gold added. Even as iPhone 3G has received criticism for being locked to AT&T in the U.S., Apple has reached out to a larger business community with its latest release.

A major factor for many businesses that might hear from users who want to use the G1 is whether it will have basic security, such as native encryption or robust user log-on passwords, Gold said. Security was not a focus of the announcement and "remains an unanswered question," he said.

Even if the G1 should most interest consumers, some analysts gave the new device a tepid review. Charles Golvin, an analyst at Forrester Research Inc. in Cambridge, Mass., said the G1 will appeal to a "somewhat advanced user" who already uses a phone to access the Internet. Still, he said the G1 is not a compelling offer for voice-centric mobile users. "Those will come later."

Even the LiMo Foundation questioned the G1's commitment to openness, noting that it has provided an open Linux platform already used by 23 handsets.

In a statement, Morgan Gillis, executive director of the LiMo Foundation asked, "Which services will be made available to mobile consumers on Google Android handsets but not on other open mobile handsets; will G1 users have an open and free choice about whether or not they subscribe to Google's services; why has Google elected to build its own handset platform rather than working collaboratively with the mobile industry on the available alternatives?"

Kevin Burden, an analyst at ABI Research in Oyster Bay, N.Y., said T-Mobile and Google have made it "pretty clear" that the G1 is "not really for the business user." But Burden said future Android phones could easily be provided to carriers other than T-Mobile and with capabilities such as Exchange support.

"Google's goal with Android has been to loosen the grip of the carriers and handset makers on the cell phone market, and I think they've partially succeeded with reaching that goal today," Burden said.

Users curious, but don't see Android in the enterprise

Brant Castellow, regional sales executive at Correlagen Diagnostics Inc. in Waltham, Mass., said his initial impression of the G1 is that "it looks a little quirky from the photos I've seen and not that sophisticated." He said that with Google's involvement, he expects it will work well, but he questioned with so many Google applications integrated into the device, "won't they have a tough time capturing the business user like me?"

Castellow uses an iPhone 3G for a variety of business functions, but said he hopes to check out the G1 when it becomes available.

Jorge Mata, the CIO at the Los Angeles Community College District, said the G1 will give Google a "strong first salvo" in the "Clash of the Titans" scenario that is building between Apple Inc., Google and others. "The openness is a great thing," Mata said in an e-mail.

Mata said Apple's approach, especially tying the iPhone to AT&T Inc., could eventually backfire for Apple. Exchange support and enterprise deployment tools are needed before there will be corporate adoption of G1 or Android phones, he added.

Still, Mata said the college district plans to support the G1 as soon as it is available, and said the Qwerty keyboard and access to Google Apps will make it a useful device for online discussions that are popular with students. "Think unified communications on this phone with productivity in the cloud," he said.

"This [G1] phone is not as sexy as the iPhone, and it does have a certain geek charm, but you should expect this to change in the near term," Mata said. He predicted the G1 will erode sales of Windows Mobile devices and BlackBerries before it starts to erode iPhone sales.

Copyright © 2008 IDG Communications, Inc.

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