Why Google Really Got Into The Smartphone Business

Over at Wired, Ryan Singel writes an ode to what Google's new Nexus One smartphone could have been, and may still one day be. In a far more detailed manner than I did yesterday, he explains why Google doesn't need to dominate the market -- just have a presence there in the years to come in order to shape mobile data access in a meaningful way. I agree that his imagining must be what Google has in mind.

He wonders when Google will be content exiting the hardware market and focusing on its main business of software and advertising. He says:

Here's the scenario that might get us there -- Google convinces HTC that it's not suicide to create a phone that can be used on any U.S. 3G network (maybe two -- one GSM and one CDMA) and then sells it unlocked. It's a great phone, and lots of people want it and there's lots of great apps that run on it.

Users then could then take it to whichever carrier they like, and get a data plan a la carte. The carriers will hate this, perhaps create unfairly high prices and very annoying "device registration fees" -- trying to protect the money they make offering phones at an initial discount in exchange for a two-year contract.

But the FCC will have passed a rule forcing carriers to accept any device that doesn't hurt their network -- much as Ma Bell was forced to open its lines -- and Google, regulators and consumers will break down those barriers. Or the market could simply take care of it, with a desperate Sprint breaking ranks with the other large US telecoms and accepting a Nexus or any other device with no registration fee and a fair price for users.

And that's when Google will stop making phones, and you'll know that the Nexus One actually meant something.

And I think that's exactly right. One thing I noted yesterday was Google's decision to offer an unlocked version of the Nexus One -- something that Apple has no intention of doing with its iPhone. Of course, this particular unlocked version is pretty weak. Sure, you don't have to use T-mobile. You can use another GMS network instead. Which means AT&T. But you can't use AT&T's 3G data network. You can only use T-mobile's. In other words, pretty much everyone who buys a Nexus One will be using T-mobile anyway!

But by offering the phone unlocked, I think this shows Google's future intent. If this were an unlocked phone that could be brought to more networks, then it could start a meaningful revolution. That has to be the next step for Google's vision to be realized, as Singel explains. Otherwise, it's hard to see why the company would bother selling smartphones. The Nexus One and its future generations are a means to an end -- a different kind of mobile world.