Image via CrunchBaseGoogle raises the white flag on transforming the US wireless industry | TechRepublicBy Jason Hiner
November 22, 2010, 3:00 AM PST
Takeaway: In order to guarantee Android’s success in 2010, Google has snuggled up to the telecoms and given up on changing the US wireless industry to make it better for consumers.
The technology industry is full of once-great companies that held on to an idea, a product, or a platform too long and ended up eventually falling hopelessly behind their competitors and going out of business or being acquired because of it. Think of DEC, Sun, and Palm.
However, the yin to that yang is when a company doesn’t give a new initiative enough time to run its course and pulls the plug too soon. Google has been guilty of this in 2010. The culprit is not a technology or a platform in this case. Instead, it is Google’s multi-faceted strategy for transforming the US wireless industry. This ambitious scheme — which few companies other than Google would have the influence or resources to pursue — has been aimed at helping US mobile users. It has now been utterly abandoned.
The final indication that Google has given up on this altruistic idea is the Google Nexus S smartphone, which CEO Eric Schmidt essentially confirmed the existence of last week during his interview at the Web 2.0 Summit.
A decade from now, 2010 will likely be remembered as the coming out party for Google Android, but it should also be remembered as the year Google traded in its advocacy of wireless fairness in order to purchase Android primacy.
I’m sure there have been lots of high fives on the Google campus this year as the numbers were released showing Android passing iPhone and BlackBerry in US market share for smartphones. However, I hope that somewhere in a cubicle or a corner office at Google there have been at least a few head-shakes or face-palms, because Google has had to ditch some of its highest ambitions in order to achieve Android success. If you’re really cynical, you could even argue that Google sold out the average consumer in order to bend to the wishes of the telecom companies and phone makers.
There have been lots of signs that this was happening throughout 2010 but the final confirmation is the Nexus S, which will reportedly be built by Samsung, sold by Best Buy, and locked into T-Mobile for wireless service. That may not sound like a big deal, if you don’t know the history of the Nexus One, the predecessor of the Nexus S.
The Google Nexus One was released in January to breathless reviews from the tech press, but lackluster sales from the public. It was a fantastic piece of hardware, truly the best Android phone that had been released up until that point and some would still argue that it’s the best overall Android smartphone to hit the market.
But, the most unique part of the Nexus One was that you could only buy it online from Google and that it was not locked to a wireless carrier so you didn’t have to sign a two-year contract the day you started using it. The trade-off was that you had to pay the full non-subsidized price ($500) to buy “the Google phone.”
For the US market, this was intended to be a first step toward mimicking the European wireless model where you can purchase your phone and your wireless service separately, giving wireless users more freedom to match up a preferred device with the service that made the most sense for the user’s needs.
Unfortunately, sales of the Nexus One were not very good in the first quarter. Users still preferred smartphones that were $200 or less - even if it meant signing a long-term contract that cost over $1000 a year. Plus, many of the people who did pony up the 500 bucks for the Nexus One and had problems with it complained about Google’s lackluster customer support.
The Nexus One, which was supposed to be opened up to all four of the big US wireless carriers, landed first on T-Mobile and then AT&T. However, before the long-anticipated availability of the Nexus One on Verizon, the product was cancelled. Then, the Sprint version was cancelled, too. Google eventually sidelined the phone and made it available only to Android developers looking for a testing device, and Schmidt said Google would not do a Nexus Two.
Now, here comes the “Nexus S,” but the only resemblance to the Nexus One is that it runs the stock Android OS without any of the additional UI “enhancements” that HTC, Motorola, Samsung and others have been layering on top of Android (typically doing more harm than good).
When you combine this move — assuming the Nexus S reports are as reliable as they appear — with the fact that Google has cozied up to its No. 1 Android partner Verizon Wireless and punted on Net Neutrality for the US wireless networks, it certainly appears that Google has lost interest in helping shape the future of the US wireless industry to make it more it friendly for consumers. That’s a major letdown coming from a company that once put up over $4 billion to bid for the 700Mhz spectrum for the sole purpose of meeting the FCC’s minimum bid and forcing the winning telecoms to accept the FCC’s open access rules.
Verizon’s 4G LTE network is built on the 700MHz spectrum that it won in that auction. We’ll see how closely it sticks to the open access guidelines when it goes live at the end of 2010.
Maybe ditching its wireless-changing ambitions was necessary for Google to achieve Android’s success, but I like to think the two things could have co-existed. Google could have hired someone else to handle the customer service and retailing of the Nexus line but continued to offer unlocked, full price smartphones in the US to give users a chance to warm up to the idea. And, meanwhile, Google could have continued to put pressure on Verizon and other carriers to keep their open access promises.
We don’t know the conversations that are happening behind closed doors. Google may be putting pressure on Verizon and other carriers in private while keeping a united front in public. But, it sure doesn’t feel like it. It feels like Google has gotten so bullish about Android’s expansion that it has tossed its consumer advocacy aside and assumed that an ascendant Android will solve all problems.
I’m sure that I will get a hold of the Nexus S and I will review it. I will probably even like. After all, the Galaxy S models are among the best Android smartphones on the market. But, based on what the Nexus S represents — Google’s surrender to the telecoms — it will be tough to ever get enthusiastic about it.
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