Google’s Phone Could Give Microsoft Reprieve with Handset Licensees

It seems that Google will release a mobile handset of its own.

Reports suggest that the mobile phone, called the “Nexus One,” will be manufactured by HTC, a licensee of Google Android, and will work on the T-Mobile network.(From a technical perspective, it probably could work on the AT&T Wireless GSM network, too, but Google hasn’t had the best of relationships with that particular wireless operator.)

Google apparently couldn’t strike a bargain with Verizon Wireless, and nothing is in the works with Sprint, which means a Nexus One for CDMA networks isn’t in the immediate cards.

With respect to Google’s foray into the phone market, I’ll be watching for a few things.

First, the phone hasn’t reached market yet. It appears to be coming, but it isn’t here. It will be interesting to see how the handset is positioned, promoted, marketed, and sold. Early indications suggest that it will include Wi-FI support, and obviously it will come stuffed with Google applications and services. Until we know the details, though, it’s impossible to pass definitive judgment on whether it will be a winner.

Second, depending on what Google delivers to market (and how it delivers it), watch closely for the responses of Google’s Android licensees. HTC obviously doesn’t object too vociferously to Google’s encroachment onto its territory, but the other Android licensees, who aren’t manufacturing the device for Google, might take strong exception to the move. Motorola has declined comment, apparently, and one wonders whether it and other licensees knew that Google was cooking up its own smartphone in the labs.

For a while, Google seemed well placed to enjoy conquests with all the vendors in Microsoft’s black book of Windows Mobile licensees. Now, until the dust settles in the aftermath of the Nexus One launch, we’ll have to see whether Google has handed Microsoft a reprieve.

Much is being written at the moment regarding whether Google will espouse a new approach to selling phones to consumers in the USA. Most handsets in America are subsidized by wireless operators, who defray the cost of the phones significantly — selling, let’s say, a $499 smartphone for $199 — but then make up for that initial subsidy by tying subscribers to lucrative long-term service contracts.

The hope is that Google will sell the phone “unlocked,” but at a price that isn’t prohibitive. It could perhaps do so by asking consumers to subject themselves to Google advertising in exchange for a price allowance on the handset. Google might sell the phone from its website, with buyers offered a menu of wireless operators at the time of purchase, according to some reports. At any rate, as Sascha Segan writes at PC Magazine, it’s probably wise not to expect a dramatic departure from convention or an imminent revolution that overturns the American telecommunications establishment.

In fact, in bringing its new phone to market, Google probably has its sights fixed at least as much on foreign markets as it does on the domestic space.

Regardless of how this story plays out, Google has injected a charge of excitement into the usual torpor that predominates just before the holiday break. It’s also given journalists and pundits a reason to do something other than their year-end top-ten lists.

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One response to “Google’s Phone Could Give Microsoft Reprieve with Handset Licensees

  1. how about the operating system and third party application? can it compete with nokia / symbian ?

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