Wednesday, January 6, 2010

Google wins, Motorola loses

The papers, the news, blogosphere etc. are all abuzz about the new Google Nexus One.

The “phone” is actually two different phones: an unlocked GSM phone for T-Mobile and an unlocked CDMA phone for Verizon due by June. Since the GSM phone will also work on overseas networks (but not AT&T’s 3G network), it’s not clear whether this phone is the one planned for Vodafone, or it will be yet a third phone.

The new phone doesn’t appear to be much different than any HTC Android phone, except that it has Android 2.1 and a 1 GHz processor from Qualcomm. (The first Android phone was also Qualcomm Inside).

The reviews have ranged from fawning to skeptical, but overall the phone appears to be an incremental improvement over existing phones. The business model — $530 unlocked or $180 with a T-Mobile subsidized contract — appears to be somewhat different, but unlocked phones have been available for years from Amazon or even my local Fry’s. (The former is how I bought my Nokia E65).

So why is Google doing this? The new OS and faster processors will be used by other vendors later this year. The unlocked model is certainly one that can be used by others. Does Google so want to get its brand out there that it has to have its own branded phone? (Having the Google logo on the back of most Android phones isn’t enough?)

One possibility is that this was an engineering (or ISV-oriented) prototype, developed for internal use, that someone decided to commercialize. Although I don’t know if it ever shipped, several years ago I heard that Nokia was working on an unlocked, reflashable handset for exactly this reason.

What is certainly happening is that Google is competing with its OS customers. I am not the only one who thinks this is a bad idea. (Android is nominally open source, but in terms of actual openness it is really provided a Google-led industrial consortium).

Who are its customers? Phandroid — a once-authoritative Android phone site — lists 15 other Android models currently available, although some of those are variants in different national markets. Three are from Samsung, two are from Motorola, one from Huawei and the remaining nine from HTC. Two are CDMA — the Motorola Droid and the HTC Hero), one is dual mode (Samsung Moment), and the remainder GSM.

Huawei has no choice, and HTC seems happy to let others rebrand its products, but what about Motorola and Samsung? (The Open Handset Alliance also includes LG and Sony Ericsson, leaving Nokia as the only top 5 handset maker not participating).

Is this a careful calculation that the major handset makers have no choice but participate? With Windows Mobile continuing its long slide, Motorola seems to have all its smartphone eggs in the Android basket. Samsung sells lots of Windows Mobile phones (BlackJack, BlackJack II, Jack) and has dabbled in Symbian and LiMo as well, but seems perfectly happy to sell its proprietary OS.

So the Chinese and Taiwanese makers will just grin and bear it, the Koreans will go on being platform agnostic (if not platform indifferent), and this gives Nokia even more reason not to join the OHA. (Not that was ever likely).

Which leaves Motorola as the one in the pickle. What should Sanjay Jha do about Android? His company already had limited brand visibility on Verizon, which is using “Droid” as its own subbrand for all Android phones from its various suppliers. Now it’s having to compete with its OS supplier.

The Japanese have an expression: “sho ga nai.” Roughly translated, it means: “ain’t nothing you can do about it.” While at Qualcomm, I’m sure Jha spent enough time selling Qualcomm chips in Japan to learn this expression, but that doesn’t make his problem any more tractable.


rahul said...
This comment has been removed by a blog administrator.
Joel West said...


Good to hear from you.

Thanks for your comments on Google. I had not seen the comment about games, which is, as you say is an important category that (I'll take your word for it) is neglected by most platforms.

However, due to prior problems of abuse, the policy of this blog (and all my blogs) is that any post that says "visit my website" or "see my blog" will be deleted.

I am not opposed to links to meaningful self-citations to specific blog articles, such as your Jan 7 Nexus One post.


rahul said...

Prof. West,

Sorry about that. Here is my repost:

I just read your article, "Google Wins, Motorola Loses". I think I disagree with your title. I personally don't feel that the Nexus One has any game changing technological advancements. Granted, it does have the fastest processor on the market, but the phone is limited to it's software. This predicament is affecting all Android Branded phones. Not just Motorola.

So what should Sanjay Jha do? I think Sanjay Jha should stick with the Android bandwagon and strengthen his partnership with Google with focusing on developing a stronger app store. In my opinion the smart phone market is dictated by two things: applications and application developers; not the manufacture of the device.

I feel this is true, because before two to three years ago the argument between carriers was about who had the lower price. After the launch of the iPhone and the iPhone App store the marketing shifted to applications, social networking access, and web browsing. All of this can be done with the four year old hardware technology. So no matter how fast the processor is, I think the user experience is the most important.

Sanjay Jha has a golden opportunity here. Android saved his company and it will continue to do so. Motorola is geared to have an Android handset on each of the major four U.S. carriers. Google has their own single handset which, by the way, is HTC branded, on only one, soon to be two U.S. carriers.

The Droid is available in stores, the Nexus One isn't. This is important because consumers still like to try things on before they buy it. Also, they love the simple emotion of instant gratification. This also goes for the Moto Cliq and the coming soon Moto Backflip, available in stores.

Secondly, pricing. The Nexus One is not available to existing T-Mobile customers looking to sign a new two year contract. It is only available to brand new consumers

This is not the case with any Motorola Android phone.

Lastly, my personal beef, I like games. The Nexus One, Moto Droid, and iPhone 3GS are the fastest phones on the market. The App store consistently boasts that the games are the top grossing, top rated paid and free apps. App List

Two out of the three most powerful phones don't even have the most basic games available. Palm announced today a partnership with EA for a full on gaming campaign.

In my opinion, Google is spending too much time worrying about hardware. It is not their space. They need to focus on software and help the hardware live up to it's full potential. I believe they Google needs to focus on their mission.

Google's mission: to organize the world's information and make it universally accessible and useful.

When Google does truly win, there is no way that everyone else running Android can lose.