Google is finding it hard to adjust to the role of ‘evil empire’, so long held by Microsoft. In the mobile world, carriers are far more concerned by the search giant’s bid to relegate them to bitpipes than they ever were by Windows, and they are attacking Google by any means they can – antitrust probes, threats of network fees, even wrongfooting the firm’s attempt to change the norms of the handset business. Google wanted to up-end the carrier controlled channels of the smartphone market when it launched Nexus One, available under its own brand and through its own online site only, with the carrier merely providing the wireless connection. But it has apparently given up the battle to persuade Verizon to support its approach, while Verizon Wireless co-owner Vodafone has refused to bow to Google’s distribution strategy.
Vodafone first delayed its launch of Nexus One in key European markets, and then announced it would be the only point of sale for the handset. As when it refused the onerous terms of Apple’s original iPhone exclusive deals, Vodafone knows that giving into a vendor that threatens its power, for the sake of the short term impact of a glitzy handset, is a fool’s game. And the Nexus One was never as tempting as the iPhone, especially once its manufacturer, HTC, came up with similar – and possibly even better – models of its own. Vodafone has launched the HTC Desire while Verizon has the CDMA version, the Incredible.
Nexus One, which is now available for pre-order at Vodafone and will ship next month, will be just another high end smartphone for the giant cellco, locked into the carrier, but at least promising full support and subsidies. Vodafone has completely bypassed the Google online store that was the heart of its attempt to disrupt the mobile operators’ norms. While they are happy for retailers such as Amazon or Carphone Warehouse to sell handsets with their contracts, they perceive these partners as complementary – not as challengers using an online store as a Trojan horse to reduce the cellco’s connection to the customer.
In the US, Google has backed away from plans to offer a Verizon version of the Nexus, indicating a weakening of its ties with the CDMA carrier. Six months ago, the two companies seemed inseparable as they co-hosted Verizon’s launch of its new smartphone strategy, heavily centered on Android. But now the operator’s key Android device suppliers, HTC and Motorola, have delivered heavy hitting products that show diminishing traces of the Google user experience, so Verizon does not need Google so much any more. HTC has its own, well regarded user interface, Sense, which now runs over all its gigahertz phones apart from Nexus – the Windows HD2, the Android Incredible and Desire, and the Android/WiMAX EVO.
Analysts estimate Google has sold only about 500,000 Nexus One models, and has now resorted to a traditional locked sales approach to save it from ignominy in Europe. This is likely to prompt a rethink about how far Google can achieve its long term goal of opening up the mobile web through devices, which alienate not just the carriers, still the key channel to market for handsets, but the Android manufacturers themselves.