Thoughts on the Google Phone (Nexus One)
It looks more-and-more like Google is going to offer a Google branded (HTC made) phone in January. If you don’t keep up on tech, it is going to look pretty much like an iphone. A lot of people are asking what does this mean for the mobile segment, the iPhone, and especially the Android platform. Here are my thoughts.
First off, I think this is a classic example of market segmentation. There is no question in my mind that device has its cross hairs firmly fixed on the iPhone. Google sees a segment, lets call it the high-end smart phone segment, with a single competitor. Now, I know a lot of people think that this segment has more than one player. But, lets be honest, there is really only one phone on the market right now that people are willing to consistently shell out $199 for, and that is the iPhone 3GS. Back to the Google phone. One thing is apparent in this segment, brand matters. Google knows this and that is why they are throwing their name behind a new phone in this segment.
So, lets assume what I said above is true: Google aims to compete directly with the iPhone 3Gs (and the iPhone 4) in the high-end smartphone segment. How exactly will they compete and, more importantly, how well will they do? I think at the beginning Google is going to compete on features and on cost-of-ownership. The Google phone is going to feature a lot of what the Droid already does: multi-tasking, built-in navigation, apps, etc. Google knows that on a feature-for-feature basis, they will fair pretty well. But, lets be honest, the iPhone 4 will probably match most of these on its release. I think the killer feature for the Google phone will be built-in, fully integrated Google Voice with free wi-fi calling, free SMS, and host of other features that I don’t think any mobile OS has an answer for, not even Apple. This is such a huge advantage because it will probably lower most phone bills by at least $10-20 per month giving the Google phone a huge advantage in lifetime cost-of-ownership.
How well will the phone do? I think the wild card here is the iPhone UX. Most people that have an iPhone are pretty passionate about this aspect of the phone. And, honestly, I don’t see a whole lot of people switching. People that have the iPhone already pay a ton of money to own one, so cost-of-ownership probably will not be a big deal to them. I do think that a new Google phone will get a large percentage of new smart phone owners, and a large percentage of budget conscious smart phone owners. Honestly, I would not be surprised if it gobbles up 1-3% of smart phone sales in its first year.
What does this mean for HTC, Sony Ericsson, Samsung, and other smart phone manufacturers? I do not necessarily look at this as a death blow to the Android platform. In fact, I think it could be a boon for the low to medium end segments of the market. A successful Google phone would bring tons of developers to the platform, and make the free to $150 Android phones pretty appealing to a large number of consumers. I also think that this is a blessing in disguise for Microsoft Phone OS. Staying out of the branded phone business could make them seem pretty appealing as long as Windows Mobile 7 is not a flop.
What are your thoughts?
