Google Nexus One pries carriers from handsets

Matt Bowman · January 5, 2010 · Short URL:

Both Google and consumers have a lot to gain from carrier-agnostic devices.

The most important announcement from Google today is not the introduction of its slick new Nexus One handset, but a much more insidious (for carriers) and hopeful (for the rest of us) move: the sundering of handsets from telecoms.

Granted, at $529 for an unlocked device, most people will opt for the more familiar subsidized model ($129 for the phone plus a two-year contract with T-Mobile), but by hyping the unlocked version, Google is demonstrating a commitment to carrier-agnostic devices. It's online phone store hints at the dawn of a new way to buy phone plans--with the phone seller acting as a storefront for various carrier options.


Android product manager Mario Queiroz also said that a CDMA version of the Nexus One will be coming to Verizon in the U.S. and Vodafone in Europe this spring. While the CDMA phone will not be available as an unlocked device, it does indicate how eager Google is to offer competing carrier plans.

This is a very good thing for consumers. For years, cheap, cool handsets have acted as bait to hook consumers into deceptively pricey plans. Think about it—at $80/ month, a buyer is committing $1920 for a connection. At a time when wireless broadband penetration is metastasizing, VoIP apps are becoming ubiquitous, and the mobile space is completely transforming every year, locking oneself into a $2000 2-year commitment is kinda crazy. If you live in Silicon Valley, you can already stay connected most of the time by hopping from one free wifi network to the next.

Google has an interest in making cell phones and data plans cheap. Carriers will soon have to compete on the merits of their connection plans alone, which means plan prices will be driven downward. This will encourage more mobile handset penetration, which will give Google more data on geolocation, app usage, purchasing decisions, mobile social networking, etc. Thanks to its advertising algorithms and networks, no one can turn user data into revenue as efficiently as Google, and the amount of monetizable personal data that will come from an Android device in every American pocket is huge.

As Google gathers that data and monetizes it, I wouldn’t be surprised if the devices become subsidized once again—not by connection plans paid for by consumers, but by ad dollars that Goog’s reels in.

Of course, it might take a year or two before that $750 million AdMob purchase pays for itself.

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