Wednesday, April 15, 2009

Consequences of AT&T and Google coopetition

In the out-takes of the interview with AT&T CEO Randall Stephenson published in the WSJ Digits blog, there was a rather pointed complaint about the Google-Apple coopetition.

“In some areas you look at Google and say, ‘They’re a competitor,’ and in some areas you say, ‘They’re a partner’…You’re always going to have points of tension with these folks,” Mr. Stephenson said.

People close to the situation say plenty of tension has built up over issues ranging from digital privacy to “open access” rules for wireless network operators. When the two sides were talking in 2007 about Google’s Android mobile operating system, Mr. Stephenson and other AT&T executives felt Google CEO Eric Schmidt misled them by understating Google’s wireless and regulatory ambitions, the people say. Mr. Schmidt, meanwhile, told colleagues he thought AT&T had a “jihad” against Google. Mr. Stephenson says he has “no inherent conflict” with Mr. Schmidt. A Google spokeswoman declined to comment.
I can see why AT&T (like Verizon and the rest of the cellphone industry) would be mad about Google’s support for net neutrality.

After reading this quote, I’m even more skeptical about the idea that AT&T is going to join the Android bandwagon.

Right now, AT&T is shipping the iPhone and various BlackBerry models. Based on this latest development, I think AT&T will embrace Nokia and Symbian long before they do anything to help the success of Android.

T-Mobile is going to stay with Android. I believe Sprint — with their sizable investment in the Palm Pre (due May 17) — are unlikely to move to the gPhone soon, but might do so in 2010.

So that to me suggests that after T-Mobile, the next Android phones in the US will come from Verizon Wireless. Yes, they have the same issues as AT&T does — but they don’t have the hit iPhone. Embracing Android would threaten Verizon’s traditional walled garden approach, but without a killer smartphone, maybe they will be more eager to get a hit device.

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