A SuperPhone with a Touch of Kryptonite

Nearly two months ago, shortly after the release of the Droid and subsequent escalation in chatter with respect to the “Google Phone” I discussed my complete dissatisfaction with the state of the iPhone as it pertained to Apple/AT&T and the impending threat (very serious threat) posed by the Google Phone.

Here we are just a week past the release of the Google Phone and akin to the iPhone, it is one impressive piece of machinery.

But just like Apple’s iPhone, we need more than good machinery and Google exited the gate with shiny new shoes, high expectations and forgot to tie their laces tripping and falling flat on its face.

Let’s consider the environment Google was entering. The iPhone, a device launched in 2007 and largely unaltered since its inception continued to dominate as the gold standard for a mobile device. In 3 years when one considers how quickly technology develops and the sheer investment (hundreds of million of dollars) by companies like RIM, Nokia, Motorola and HTC, to develop the “iPhone Killer,” the fact that no phone has come remotely close to dethroning the iPhone is laughable.

The king of all phones however was tied to the peasant of all carriers (AT&T). The truth was that even the best phone was not enough to sway a majority market share to AT&T. People still value network quality over phone functionality.

With this void in the mobile market there appeared to be a shimmering light. Google, a company whose own innovations have enhanced and touched the online experience of nearly every Internet user, was ready to throw its hat into the ring, not just as a software developer but also as a manufacturer/retailer.

Google? Selling their own phones? This will change everything. Right?

At first, things appeared bright. Recent leaks of the “Nexus One” showed a phone with incredible hardware and a great deal of potential. Would the Nexus One “kill” the iPhone? No. But we don’t want an iPhone killer, we want a market mover, a close 2nd…anything that doesn’t appear to be developed by someone living under a rock. And this phone seemed to heed that call.

The next big part of this puzzle would the carriers. Would the prayers of Verizon customers be answered? Would Verizon iPhone envy be cured? Kinda. Sorta. Not really… but soon.

T-Mobile was announced to be the first true carrier of the Nexus One with the ability for AT&T users to join in on the fun and a soft availability date for Verizon in the spring (’10).

The final part of this equation would be cost. It was presented that the Nexus One would cost $179 for users with a contract and $529 for an unlocked unchained non-contract phone. Not bad Google.  You even gave us a website to buy the phone. Quick and easy.  Right?

Wait did I say quick and easy? You see I made the same mistake with Google that I made with Apple. I assumed that these innovative companies were vaccinated or immune from the stupid-virus that plagues most cell phone carriers.

Check out what we missed:

1)     If you’re an existing, loyal, returning customer of T-Mobile and ready to sign another new contract they show their appreciate for your returning business by charging you $379 as opposed to $179.

Let’s consider the implications for just a moment. Existing customers, people patient enough to continue using the 2nd WORST carrier in nation, the small few who have managed to accept the idea that their cell phone service will be crap are being shut out from buying the Nexus One by inexplicitly charging $379. These are supposed to be the easy sales! WTF??

2)     The next revelation is the early termination fee. I’m sorry, early termination fees. Both Tmobile and Google get a slice of your wallet should you realize this whole experiment was a horrible decision… and wait they take the phone back too.

1. Tmobile:   $200

2. Google:  $350

I have nothing more to say on this matter. Those numbers speak for themselves and that is unacceptable.

It is no wonder the Nexus One only sold 250,000 units in its first week. And it’s sad. This is a fantastic device and Google is a great company. But the steps taken in the launch of this device display the arrogance and disconnect mobile providers and manufactures have with their customers.

Google has a hefty hill to climb as the divide between the Apple ecosystem and Google ecosystem draws ever deeper. Simple pricing, broad carrier coverage and low risk trials would have permitted Google to make significant strides in a battle for customers for its mobile camp.

Every app purchased on a mobile device represents a small investment by a mobile user in their respective mobile ecosystem whether it Blackberry, Android or Apple. Google is late to the party and new to the industry.

If Google plans to challenge Apple in a meaningful way (especially when both phone developers find themselves on the same carrier) it will need to demonstrate as much thought to its mobile services as it has to its other businesses. Fortunately for Google, they are… well Google. And they get more than one shot.

I expect that we will see big changes from both Apple and Google in Spring 2010.

Categories: Mobile
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  • Fred

    Good stuff.