Bloomberg is reporting that all US carriers may get access to the iPhone over the next 18 months, according to a financial analyst report. The key word in that sentence is "may."
On Wednesday it's very likely that AT&T will lose iPhone exclusivity. Indeed if Apple wants to push the iPhone deeper into the US market it must make the device more broadly available.
The Nexus One, which I've been using for a few weeks, is the first Android device that's "good enough" to preempt the iPhone. In some ways the N1 is more impressive than iPhone 3GS; but expect the 4G iPhone to pull out some surprises.
The current iPhone is GSM. But there's speculation about a CDMA version for Verizon, which could also work on the Sprint network. Apple reports earnings today and it will also reveal how many iPhone OS devices it sold last quarter. The total could well push the OS beyond the 70 million mark on a global basis. We'll see.
The Palm Pre (which I own and increasingly dislike) and its sibling the Pixi are coming to Verizon. If Apple announces the iPhone for Verizon it will kill Pre sales there, though perhaps not the Pixi since that's a potentially different audience of potential buyers. One question is whether we'll see the same subsidy from Verizon that AT&T has been providing. Probably so.
Another variable is the forthcoming tablet: Will it affect iPhone or iPod Touch sales? That depends in part on the price. That's unclear at this point although there is a range of theories: $800 unlocked to $500-$600 with carrier subsidy. The iPhone probably wouldn't be affected by the "iPad" but the iPod Touch could be.
If in fact the iPhone comes to all US carriers, it will very likely become the dominant smartphone in the US market. RIM and Android/Google (and its OEM partners) will try and prevent that but the momentum would be huge. The caveats and questions are: whether the device will become available widely and how soon?
Even with "only" Verizon availability that would mean access to 89 million more potential buyers in the US market.
The mobile analytics segment is starting to mature and rapidly becoming more competitive. M:Metrics has been arguably the strongest player in the segment for the past few years. The company was acquired by comScore in May, 2008. Since that time new players such as Pinch Media and Flurry have arisen, among others, to measure the smartphone apps marketplaces. These two firms merged in December.
But there are a slew of others out there trying to help marketers gauge where to place their mobile ad dollars. Today a company called "GroundTruth," based in Seattle and founded by one of the co-founders of Medio Systems, Michael Libes, emerged from "stealth mode."
According to the release out today:
To date, estimates of Mobile Internet traffic have varied markedly, making decisions difficult for publishers and advertisers. Publishers have been unable to validate their audiences or use the information to understand their competitors. Advertisers have struggled to justify media buys or effectively evaluate mobile marketing campaigns.
Ground Truth data comes directly from mobile operators and other data providers to report aggregate mobile data usage, on any visited mobile site. What the company has found using this superior methodology dispels many commonly held beliefs about how consumers interact with the Mobile Internet.
The company argues by implication that its analytics are much more accurate than competitors (read: comScore). GroundTruth is getting its data mostly from mobile carriers (probably by paying for it or cutting some sort of barter deal). The company received $2.6 million in venture capital funding to date. And GroundTruth's data set consists of 2.5 million mobile users.
As a teaser GroundTruth put out "Top 10 Mobile Web Sites"* for the first week of 2010 (January 4-10, 2010)
(Ranked by total Page Views)
*Not including pages served by operator portals
This is very different, for example, than Nielsen's Top Mobile Sites list for most of 2009:
Libes told Moconews some other observations about the market, based on its data:
I'm actually skeptical of the top 10 list provided by GroundTruth. I assume this list is "everyone" and not simply smartphones or feature phones. I'm eager to talk to the firm about its methodology.
As popular as MySpace remains, I'm doubtful that it's truly the most visited mobile website. And while Mocospace has been around for some time, I'm also skeptical that it actually ranks as well as the GroundTruth list argues.
Consider the following list from Opera for November, 2009, which is based on actual usage rather than survey data:
Regardless, GroundTruth is a potentially strong and direct challenger to comScore (and Nielsen) because of its claims of greater accuracy and methodology based on actual usage and behavior rather than sampling or surveys.
The recent "price war" between US carriers Verizon and AT&T puts number three and four carriers Sprint and T-Mobile in a bit of a difficult position. Both had been competing on price, although more recently there has been a greater hardware focus in their marketing.
There's a considerable gap between Verizon and AT&T subscriber numbers and T-Mobile and Sprint. Will the two smaller carriers respond and further lower prices? For now, according to the WSJ, Sprint isn't going to:
Sprint—suffering from an image problem following its Nextel merger—has used the lure of lower prices to try to stem customer defections. Price cuts by Verizon Wireless and AT&T Inc. have narrowed that advantage.
For example, a plan with unlimited calling, texting and data transfers costs $100 at Sprint. That same plan is now only $120 at AT&T or Verizon, compared with $150 before the price cuts that took effect Monday.
Sprint has a strong network (now with excess capacity because of subscriber losses) but that hasn't been able to stop the bleeding. The company's future hinges on its ability to deploy 4G faster than its rivals. But it may not be able to if cash becomes too tight and/or as Verizon and AT&T both seek to aggressively roll out LTE.
If the iPhone does come to Verizon this year (as is rumored) that may drive another round of losses for T-Mobile and Sprint in particular, which has had a harder time of retention. And even though the strategy has not paid big dividends to date, Sprint may be compelled to put more price distance between itself and its competitors. Recently, for example, it opened up the Boost $50 unlimited plan to the Sprint CDMA network.
As a consumer I'd welcome a full-blown price war; but the carriers don't want it obviously. They want to get rid of unlimited pricing entirely.
As was reported yesterday Google has added some new targeting capabilities to AdWords for mobile devices:
If you've chosen to show ads on iPhones and other mobile devices with full internet browsers, you can now target specific mobile devices or carriers.
This feature makes it easier for you to reach the right users if you have a carrier- or device-specific message. This includes landing pages that have been optimized for a specific device, billing relationships with certain carriers, or mobile apps developed for a specific platform . . .
We're also making sure that ads linking to mobile app downloads will automatically appear only on devices that offer those apps. Plus, the ad will display a 'Download' link instead of a URL. Simply include 'itunes.apple.com/' or 'market.android.com/' followed by the app name in the ad's visible URL, and it will automatically display as 'Download iPhone App' or 'Download Android App.'
Here's what the screen looks like:
As the Google AdWords blog points out this is helpful if the advertiser is targeting a specific type of handset or specific carrier's users for a promotion. But there's also proxy demographic information here too. Ad networks such as JumpTap that work directly with carriers actually provide that data ("by age, gender, context, demographics, location, ethnicity, finance, occupation, handset, and language") to advertisers at varying levels of anonymity. Presumably Microsoft is also getting access to some of that data through its deal with Verizon.
However, the profiles of users of MetroPCS and Cricket are going to be quite different than Verizon for example. Much of this information is out in public.
What's also interesting is that Google is adding carriers for whom there are effectively no smartphones. Boost/Nextel (Sprint) just added its first BlackBerry device and MetroPCS and Cricket have very limited smartphone selection. The prerequisite here for the showing of AdWords in mobile is the presence of a full Internet browser on the handset. This anticipates, in my view, Android devices for these carriers.
This list of check boxes in the screen above will likely become more elaborate and precise over time. For example, the ability to target BlackBerry users (ultimately) might be important for advertisers wanting to reach an enterprise audience or more affluent users in certain cases.
Google's mobile AdSense units have a range of targeting options, including location (which also exits for AdWords). AdMob, which Google is seeking to acquire, offers more elaborate targeting including by gender and age.
Mobile payments platform BOKU has announced that it raised "$25 million in series C capital led by DAG Ventures, Inc. with continued participation from Benchmark Capital, Index Ventures and Khosla Ventures." This brings the company's total funding to nearly $40 million.
BOKU launched in the middle of last year and is immediately one of the leaders (the other being Zong) in the mobile payments and virtual goods space, already worth about $3 billion globally and expected to be worth billions more over time. BOKU said has "relationships with over 1,000 game and application developers, including almost all of the top applications for virtual goods and currencies purchased on Facebook. BOKU’s mobile payment service, Paymo, is enabled across 190 carriers worldwide in 58 countries, and reaches a potential 1.8 billion customers."
Almost identical to Zong in its approach, the company enables online payments by using a mobile phone number. The benefits of this are that a mobile phone number is easily remembered, hard to commit fraud with (given the authentication/confirmation system) and removes friction from online payments.
The company acquired competitors Paymo and Mobillcash and will be changing its consumer brand to "Paymo." BOKU will remain on the platform and developer side. The company's CEO is Mark Britto, who ran Ingenio before it was acquired by AT&T.
I spoke yesterday to Ron Hirson, BOKU's SVP Product & Marketing. We discussed various future scenarios for the company. Right now BOKU relies exclusively on mobile carrier billing, which limits transaction thresholds (although BOKU's are higher than competitors). In the future it could add credit card account association, which Zong has done.
Hirson and I discussed payment systems such as Square, that involve offline payment acceptance via mobile devices. Hirson expressed some skepticism about the size of that opportunity.
BOKU wants to move into more traditional e-commerce, but for that to happen carriers need to reduce transaction fees (which can be as high as 50% in some cases). Hirson said that was slowly happening. In addition payment thresholds would need to be significantly raised (from their current $10 to $30). I'm not sure there's an appetite for buying big ticket items with carrier billing, expect perhaps by people who don't have credit cards (analogous to BillMeLater).
Most interesting to me is the use of mobile as a credit card substitute in the real world. That's not a market BOKU is yet focused on.
I asked Hirson about who he thought BOKU's major competitors are/would be over time. He said PayPal, Facebook (potentially) and maybe iTunes, if Apple chooses to go in that direction. I said I also thought that Google would make a bigger play at some point and acquire someone, given that they largely missed the opportunity in round one with Checkout.
Here's a video demo of how BOKU works:
Verizon has just changed/streamlined its pricing and plans. As a practical matter these changes will represent an increase for those on the lower end of pricing but a real cut in pricing for those on the higher end. Verizon's unlimited calling plan (w/o text or Internet) is now $69.99.
These plans undercut Verizon's chief rival AT&T. That may cause AT&T to respond by similarly cutting prices (which it has this afternoon).
This sort of aggressive pricing is somewhat at odds with where carriers want to take the market. Indeed, Verizon is planning for a time when it switches from flat-rates to usage-based pricing. Verizon CTO Dick Lynch recently was quoted by the Washington Post:
The nation’s largest wireless service operator thinks the days of flat-rate plans may be over, according to Verizon chief technology officer Dick Lynch in an interview Thursday at the Consumer Electronics Show. Instead, the company will probably charge a base rate for its users and allow multiple authenticated devices to be attached to its network. Then it will charge by how much bandwidth is used by a provider – a business model known as usage-based pricing.
“The problem we have today with flat-based usage is that you are trying to encourage customers to be efficient in use and applications but you are getting some people who are bandwidth hogs using gigabytes a month and they are paying something like megabytes a month,” Lynch said. “That isn’t long-term sustainable. Why should customers using an average amount of bandwidth be subsidizing bandwidth hogs?”
The strain placed on the AT&T and O2 networks from the iPhone is well documented. AT&T made lots of silly and self-destructive remarks last quarter in public about getting heavy data users to voluntarily cut back even though they had unlimited plans.
As Lynch's comments indicate the carriers very much want to do away with flat-rate pricing. As a matter of competitive reality that may be challenging. Sprint and T-Mobile are likely to continue to use it to lure customers -- or lure them from Verizon/AT&T of the two larger carriers change their pricing structures.
The shift to 4G, however, will provide an "opening" and opportunity for carriers to introduce new pricing schemes and get away from "all you can eat." We'll see if the market allows it.
The US cable operators have tried and failed in the past to get into the wireless business. But with telcos gunning for their cable TV business, Cox and its brethern are getting back into wireless. Specifically Cox, "your friend in the digtial age," will be reselling Sprint's 3G and later the Sprint/Clearwire 4G network. Cox also owns some of its own 700 Mhz spectrum.
It will offer a "quadruple play" bundle: TV, Internet, landline (VoIP) and wireless. Cox is an investor in the Clearwire initiative. Whether or not people will "go for" Cox Wireless will depend on price: the stand-alone price of the service or the bundled price with other services. There's been no mention of what those prices might be.
Clearwire, the US-based WiMax network operator, will launch the first 4G-enabled dual-mode smartphone in the second half of this year, according to chief executive William Morrow.
A dual-mode WiMax smartphone will enable mobile users to download internet content up to five times faster than the current generation of 3G handsets as well as make voice calls over Sprint Nextel's existing voice network. Sprint holds a 56.5 per cent stake in Clearwire
In the first 6 months of 2009, more than one of every five households (22.7%) did not have a landline telephone but did have at least one wireless telephone (Table 1). Approximately 21.1% of all adults--approximately 48 million adults--lived in households with only wireless telephones; 21.3% of all children--nearly 16 million children--lived in households with only wireless telephones.
The percentage of households that are wireless-only has been steadily increasing. The 2.5-percentage-point increase from the last 6 months of 2008 through the first 6 months of 2009 is nearly equivalent to the 2.7-percentage-point increase observed from the first 6 months of 2008 through the last 6 months of 2008. The percentage of households that are wireless-only increased by approximately 5 percentage points in just 12 months, from 17.5% in the first 6 months of 2008 to 22.7% in the first 6 months of 2009.
The percentage of adults living in wireless-only households has also been increasing steadily (see figure). During the first 6 months of 2009, more than one of every five adults lived in wireless-only households. One year before that (i.e., during the first 6 months of 2008), one of every six adults lived in wireless-only households. And 2 years before that (i.e., during the first 6 months of 2006), only 1 of every 10 adults lived in wireless-only households.
Given the trend, it's likely that we'll hit 25% at some point in 2010. That's a lot of people.
Chief Executive Bill Morrow told Reuters on Thursday that the upstart operator founded by wireless pioneer Craig McCaw is keen on selling space on its small but expanding WiMax network wholesale to other network service providers, though he would not say which he was in discussions with.
Companies like Deutsche Telekom's T-Mobile USA, or other wireless providers such as Leap Wireless and MetroPCS Communications, could make sense as wholesale clients, Morrow said.
Sprint is the majority owner of Clear and could prevent such a move if it wanted. But if rival carriers are able to provide the same network speeds as Sprint -- to say nothing of LTE from Verizon and AT&T -- Sprint will have no competitive advantage that it can market to customers and prospects. The move to wholesale 4G argues to me that connectivity will truly be a commodity in the near term.
Sprint is the majority owner of Clear and could prevent such a move if it wanted. But if rival carriers are able to provide the same network speeds as Sprint -- to say nothing of LTE from Verizon and AT&T -- Sprint will have no competitive advantage that it can market to customers and prospects.
The move to wholesale 4G argues to me that connectivity will truly be a commodity in the near term.
AT&T has announced that it will be adding up to five Android phones this year, from HTC, Motorola and the Mini 3 from Dell. It will be the exclusive US carrier for the Dell device. AT&T also announced that it would be adding two Palm handsets (Pixi, Pre?) to its lineup.
With this announcement from AT&T, all the major US carriers will be now be offering Android phones. These new handsets, reportedly coming in the first half of this year, all but confirm that the iPhone will be shedding its AT&T exclusivity, which is critical for Apple if it wants to maintain momentum in the US market.
AT&T says it wants to be the leader in smartphone devices. We'll see how this wide availability of smartphones accross the major carriers affects their market share, which is currently between 15% and 17% in the US.
Gizmodo has what look like screenshots of PowerPoint slides from a Google presentation about the forthcoming Nexus One, to be announced (in all probability) on January 5 at a special Google press event.
According to the Gizmodo report, which relies on a "tipster," the phone will sell unlocked for $530 and with a two-year T-Mobile plan for $180. Let's assume all this is true.
The post also says that there's a single rate plan available, the $79 "everything" plan. That's actually the best post-paid plan on the market in the US, beating Sprint's $99 "everything" plan. The Sprint network, however, is considerably stronger than the T-Mobile network.
Apparently there's a limit of five phones per Google account, which you must have to buy the phone online.
T-Mobile has the HTC G1, the HTC MyTouch 3G and the Motorola Cliq (with "MotoBLUR"). The Nexus One then becomes just the next in line for both Android/Google and HTC. Apparently if you buy the phone at the subsidized price and then cancel the T-Mobile contract you're penalized and must pay the difference between the subsidized and unlocked prices.
You could also buy it unlocked and use it with the AT&T network. However that's unlikely for several reasons, among them the $530 price and the battered reputation of AT&T's network. The GSM Nexus One won't work on Sprint or Verizon's networks in the US.
I could be quite wrong but I doubt that Google will sell many of these handsets for $530. One question I have is: Will it be avaiable to hold and test in T-Mobile stores. The rumors leading up to the announcement suggest it won't, which will also negatively affect sales.
In the end then this turns out to be not the one "Google Phone" but another HTC Android handset, among a growing number. Yet it has the distinction of being (for now at least) the best Android handset in the market -- better and faster than Droid.
TMONews captured a T-Mobile forums screenshot that reflects it will support the Nexus One and that the Google Phone will be launched in early January. Google has scheduled a press event for Jaunary 5, which is the rumored date for launch of the device.
Here's what the site says about the phone and how it will be sold (verbatim):
Some people have argued this device is aimed primarily at markets outside the US.
Regardless, success of handset in the US will be tied to price. Will so many smartphones at $199 or less, any pricing above $200 will see very mixed results for Google/HTC. To get to $200, however, it will need to be subsidized by someone.
TechCrunch points to an SEC filing that shows ChaCha as having raised another $7 million. The "mobile answers" service recently sought to diversify its model, which is SMS advertising, with coupons. Apparently the coupon effort, right now limited to ChaCha's home market of Indiana has been popular.
While coupons is a very crowded segment it's also highly popular with consumers. It's one of the forms of mobile advertising that consumers don't object to in the abstract. (There's a difference between survey responses and consumer behavior in practice; however consumers tend to object to ads on mobile devices generally.)
Not long ago, the company tied coupons to the mobile service:
ChaChaCoupons.com's new "C3 on demand coupon service" allows users on the go to easily text in a request for coupons by business type or name and receive several offers back from ChaCha on their cell phone. For example, customers may text "C3 pizza" or "C3 tanning" to 242242 and receive offers for pizza or tanning. Or, they may text in "C3 Cabo Sun" to see all of the current offers from the business Cabo Sun. Additionally, ChaCha offers a simple "directory assistance" free text-based business category search. Users may simply use "biz" followed by a business type or category on their cell phone to find a listing of names, phone numbers, and addresses of local businesses. For example, customers may text "biz pizza" or "biz clothing" to 242242 and receive a listing of these businesses in the area.
The company has struggled financially because it was somewhat ahead of the market. However, getting into coupons and the rising interest in mobile marketing may help ChaCha in 2010.
With this latest cash infusion the company has reportedly raised $70 million (approx.) over several funding rounds.
Bar none the Nexus One (made by HTC but branded Google) is the best Android handset on the market. It ends Droid's claims about speed and power. I had a chance to play with it last week for about five minutes. Here were my quick takeaways:
Here's more from Gizmodo after its "hands-on." Engadget asserts there will be an "invitation only" sale starting January 5 (think GMail, G Wave rollouts) with broader availability sometime thereafter, including directly from T-Mobile.
While I still don't believe this bests the iPhone holistically -- although it does in terms of speed -- this is a compelling device. In fact it's more compelling than any of the other Android handsets being sold by Google's partners. Verizon has built interest in the "Android brand" with its massive "Droid" marketing campaign. Now Google comes along and puts out a better phone that will benefit from Verizon's marketing spend and related brand buzz it's created.
I don't know what the price will be -- a key variable here -- but I heard a rumor that it would be $99 with a two-year T-Mobile contract (some arrangement between Google and T-Mobile has been made to subsidize the device). If that price is correct it will be a big hit, capital "H." It won't work in the US on Verizon or Sprint's networks because its appears to be a GSM only device.
For now Droid is safe at Verizon. But people who were buying the phone because they were getting something cutting edge will now have to deal with "second best." What exactly is Google doing, risking alienating its partners and Motorola in particular, here? It's not clear if this is arrogance, shrewdness or simply a myopic emphasis on building the best Android device possible.
Google has a history of competing with partners because it's focused on building the best consumer experiences it thinks it can. We'll know at the end of next year answers to the following:
Here's a video walk-through of the user experience of the Nexus One:
See related: Android's 'Campbell Soup' Strategy
Boost Mobile (the pre-paid subsidiary of Sprint) has been on something of a tear -- as they say in the vernacular. It has seen subscriber rolls grow, because of its aggressive pricing. Indeed, the company offers a US operator best $50 "all you can eat" plan. Next best is T-Mobile with a comparable (post-paid) plan for $79.
The problem with Boost's offering is that it operates not on the Sprint 3G network but on its slower iDen (Nextel) network. In addition the phones are pretty unappealing for anyone wanting to do more than make calls and send a few texts. But now comes a Motorola Android handset for iDen, the Opus One. Depending on its price, it should eventually become the most widely penetrated phone on the Boost network.
There's no price war happening among the post-paid carriers, despite my best hopes. We'll see if the availability of an Android handset and a very cheap unlimited plan raises pressure on the post-paid carriers (mainly T-Mobile) to bring down prices further.
On another note, the rumor about pricing (take this with much caution) for the new Google Phone/Nexus One is that it will come out on January 5 and have a $99 price point with a two-year T-Mobile contract. If that's true it's pretty compelling and may drive some business to T-Mobile (probably at the expense of Sprint and/or smaller rivals).
Boost is not the only iDen carrier in the US, however it's the most visible.
ComScore came out with data this afternoon that shows Android users are highly engaged with the mobile Internet and that Android's "brand" is gaining traction and awareness among consumers, who previously didn't know what Android was. Thank Verizon, with its audacious and testosterone-infused Droid campaign.
The amazing thing -- no, the "genuis" of Google's strategy -- is that others are building the Android brand and Google is the principal entity reaping the benefits. Google is the one constant in the ever-multiplying field of Android mushrooms. According to comScore:
Google’s Android platform has continued to gain awareness among U.S. consumers. In August 2009, just 22 percent of mobile users had heard of the Android, while in November 2009 this figure had reached 37 percent, largely prompted by the Verizon Droid advertising campaign launched in the fall. The comScore study found that not only is general awareness increasing about Android, but intent to purchase an Android-supported device is also increasing among mobile phone users.
Verizon's marketing dollars are helping build buzz for Android more generally, not just Droid. Indeed, Droid has already been surpassed by the phone that's not yet out in the market, the Nexus One, which is faster and better.
Here are comScore data about mobile media engagement:
The following chart is about intent to purchase among those considering buying smartphones in the next 90 days. In total 17% of consumers plan to buy an Android device, with Droid leading the pack because of the major ad spending. Amazingly more than 50% plan to buy a BlackBerry of one sort or another. One question: are these existing RIM users or those coming from another handset?
The only WinMo device on this list is the AT&T (HTC) Tilt, unless you assume that the 8% "none of the above" includes WinMo devices. The list features 0% Nokia devices -- unless, again, you wistfully assume that "none of the above" is a repository for Nokia smartphones.
McDonalds will begin giving away (rather than charging) for WiFi access in January. According to the WSJ:
Starting in mid-January, McDonald's will lift a $2.95 fee that it had charged customers for two hours of wireless Internet access, available at about 11,000 of its 14,000 domestic locations, McDonald's USA Chief Information Officer David Grooms said in an interview.
This won't motivate me to go to McDonalds as a destination but in a choice between "quick service restaurants" it could tip the balance. AT&T is the network provider.
It's another step toward WiFi/connectivity everywhere, which is coming in the next few years. I want to pay one price for at home and on-the-go access not $40 at home and $60 for a dongle. Or . . . I want it free. Hoping that the days of double and triple billing for Internet access will be done in a couple of years.
Trackpad maker Synaptics and several partners debuted a new handset called Fuse, which showcases design concepts for future touchscreen devices. From the press release:
Fuse extends the now-prevalent touchscreen-based user experience first unveiled in August 2006 with Synaptics' award-winning Onyx mobile concept. With Fuse's bold lineup of innovative interface technologies, Synaptics and partners tackle the difficulty of single-handed usage and the need to look at the screen - two key challenges faced by on-the-go users in current-generation touchscreen phones.
Fuse's innovative sensing technologies surrounding the entire device enable quick, intuitive, single-handed navigation. For example, grip sensing achieved via force and capacitive touch sensors on the sides of the phone allows the user to execute common controls such as pan and scroll. In addition to the novel side sensors, Fuse introduces for the first time, 2D navigation from the back of the phone. This feature offers yet another mode of effective and fun single-handed control without obstructing the display or enhanced usability, Fuse combines multiple sensory input and feedback technologies including active 3-D graphics and next-generation haptic effects.
The unifying concept is that the phone is intended to be used/accessed with one hand (see video below). It's exciting to consider that many form factors and devices may emerge in the next few years that will make the smartphones of today look like the early PCs that were boxy and awkward.
With its colorful touchsceen and regard for design, the iPhone is the mother/father of one line of this next generation of devices.
The categories of netbook, tablet and smartphone may blur and get mixed up as all these devices become VoIP phones and portable computers become increasingly powerful. In the not-too-distant future mobile devices become the primary way that people access the Internet.
Before Android launched there were rumors that Google was developing its own mobile phone. Those rumors turned out to be "sort of" true as Google displayed Android, a mobile phone operating system. The company said it hoped that would spawn hundreds of mobile Android devices. Cut to a little over a year later and one financial analyst recently predicted that there would be roughly 50 Android phones in the market next year.
Almost every major handset OEM has or is launching an Android line. HTC, Motorola and Samsung, in that order, are the three leading Android OEMs so far. And PC makers such as Dell and Acer are making Android handsets as well.
By all measures Android has been a huge hit for Google -- and maybe its most strategic product after core search -- yet all Android devices and experiences in the market today still fall short of the integrated hardware-software experience offered by the iPhone. Android has features and capabilities that the iPhone does not -- especially the ultra-masculine Motorola Droid. Yet there remain rough edges, flaws and awkwardness about the user experience. (I'm not suggesting the iPhone is perfect, but it's still the best overall mobile device in the market.)
Google is clearly aware of all of this. The deep involvement of the company with Motorola and Verizon to bring Droid to market shows how it wants to realize its vision of what Android can be. To that end in late October rumors surfaced of a new "Google Phone" -- a Google branded handset that would be sold directly by the public and designed/developed substantially by Google.
Yesterday word got out (via Twitter and blogs that picked up Tweets from Google employees) that this mythical Google Phone had been distributed internally as a holiday gift. Yesterday during the day more detail emerged from a range of sources. Reportedly built by HTC, it's called the "Nexus One." According to the WSJ:
The phone is called the Nexus One and is being manufactured for Google by HTC Corp., these people said. It runs Android, the operating system for mobile phones that Google developed, they added.
But unlike the more than half-dozen Android phones made by phone manufacturers today, Google designed virtually the entire software experience behind the phone, from the applications that run on it to the look and feel of each screen.
The Internet giant is taking a new, and potentially risky, approach to selling the device. Rather than selling the phone through a wireless carrier–the way the bulk of phones are sold in the U.S. today–Google plans to sell the Nexus One itself online. Users will have to buy cellular service for the device separately.
The image at the upper right is an alleged picture of the device (from Cory O'Brien).
At Google, we are constantly experimenting with new products and technologies, and often ask employees to test these products for quick feedback and suggestions for improvements in a process we call dogfooding (from "eating your own dogfood").
Well this holiday season, we are taking dogfooding to a new level. We recently came up with the concept of a mobile lab, which is a device that combines innovative hardware from a partner with software that runs on Android to experiment with new mobile features and capabilities, and we shared this device with Google employees across the globe. This means they get to test out a new technology and help improve it.
Unfortunately, because dogfooding is a process exclusively for Google employees, we cannot share specific product details. We hope to share more after our dogfood diet.
But in the wake of all the other information now out there and surrounding the device, the statement above is a little like Tiger Woods denying he's had affairs at this point. Perhaps this device, allegedly running Android 2.1, will be a true rival to the iPhone.
Google's recent Navigation, voice search advances and "visual search" are exciting products. If these and other apps and software have been integrated in an elegant way with the hardware, the device could be very impressive. In the meantime, to build its reputation as the most advanced platform on the market, Google is favoring Android when it does product launches (e.g., Navigation, Google Goggles), promising to bring the same functionality to other platforms (read: iPhone, et al.) sometime later.
Let's assume that this GPhone device will be sold unlocked to the public; and let's assume it's a GSM device so that it offers the broadest international reach possible out of the gate. All of that is great. However, one fundamental issue with the device is price. Unless Google were to subsidize the phone itself it would be probably twice as expensive as other Android handsets in the market. That would keep lots of people away.
And the company does risk ruffling carrier feathers or worse by going straight to the public. Despite the fact that Google Voice is morphing into a Skype competitor, the company is several years away from being able to function as a wireless operator. In a future, potential scenario Google resells 4G WiMax from Clear (it's an investor) and VoIP calling with Google Voice as part of a package. But Clear's coverage is not yet able to support that model. Perhaps three years from now.
On the other hand, mobile operators in the US (if not globally) need to be very afraid of pent-up consumer demand for cheaper or more complete alternatives, such as a 4G subscription that might cover Internet access in the home and on the go. The iPhone, BlackBerry and, to a lesser degree so far, Android devices have shifted the balance of power from the operators to handsets and devices. And VoIP calling options will only get better and put more pressure on carrier voice revenues over time.
Notwithstanding all the carrier app stores and other efforts, the era of the "dumb pipe" is truly dawning. There will only be two ways for operators to compete going forward: with their networks and with pricing. Other considerations will be a distant second or third in the consumer mind.
If Google does sell this device unlocked and online we'll see what the carrier reaction is. Google probably figures there won't be much (if any) backlash because their power is waning. But probably the biggest determinant of the success or failure of this hypothetical, idealized device will be the perennial and mundane issue of price.
Related: Silicon Alley Insider says that the phone may be serviced by T-Mobile, which will offer a credit to bring the price down:
It appears the phone will be ideally serviced by T-Mobile, as that's the 3G radio bands it's suited for. Perhaps T-Mobile will offer a $200-300 service credit (in lieu of a device subsidy) for those signing 2-year contracts.
Opera announced yesterday that it was releasing Opera Mobile 10 to carriers and device OEMs. According to the company's blog post:
This direct-to-distributor version is available on Android, BREW, Windows Mobile and Symbian/S60 smartphones and includes Opera’s new, cross-platform UI framework. As a part of Opera’s shift to unify the look and feel of its mobile browsers, the cross-platform UI framework allows operators and OEMs to implement the same user experience quickly and cost-effectively across their entire range of handsets.
Opera says it's already on 135 millionn handsets globally. While there are no other browsers on the iPhone (yet) Opera is available for Android, Windows Mobile, RIM and Nokia smartphones.
Mobile has been much more successful for Opera than the PC. In mobile the company has a leadership position in terms of number of installs.
BlackBerry, which the browser is already on but not part of the 10 release, is another key platform for Opera in the US and beyond.
Aggressive moves are necessary if the company wants to maintain its share and stay ahead of competitors. Android has its own browser for example. Users must be shown that using Opera offers a superior experience on those handsets. Window Mobile's browser is improving too. Eventually I believe Apple will allow other browsers into the App Store.
Firefox also has yet to show up in mobile in a big way. But the company promises to give Opera a run for its money as it expands out from this early beta stage.