Google Nexus One: Why this smartphone is making so much buzz?

The Google Nexus Phone is generating lots of buzz around the internet. Rumor of the search engine giant releasing its own smartphone doing rounds for quite some time and then the picture of the Google Nexus one surfaced on Twitter followed by its specs and features. The industry is abuzz with various speculations- Will Google directly sell its mobile phone? Will the Google Nexus be an unlocked phone? If it is, then it would be pricey; How Google will attract customers? Will it be a network subsidized phone? so on so forth. In this article, I will give you various information about the Google Nexus One that has come out so far and all the speculations.

Naming of the Google phone:

The name “Nexus One” first appeared in the filing submitted by HTC to Federal Communications Commission (FCC). On December 11, 2009, (Engadget report quoted the date to be December 10^th) Google filed an application with the United States Patent and Trademark Office for the name to use on its cellphone.

The name “Nexus One” was taken from a science fiction novel, “Do Androids Dream of Electric Sheep?” by Philip K. Dick. Verizon named their phone “Droid” which is taken from Geogre Lucas’ science fiction movie, Star Wars and they licensed the name “Droid” but Google did not do so which did not go well with Philip K. Dick’s family.

In an interview published on December 15, 2009, Isa Dick Hackett, Mr. Dick’s daughter from his fourth marriage with Nancy Hackett, said that she had been shocked and dismayed after finding out the naming of Google phone after her father’s famous characters. She also said that Google did not talk with them or took any permission. She is now discussing about this matter with her legal counsel. Bits.blogs.nytime.com reports:

Ms. Hackett, president of Electric Shepherd Productions, the arm of the Dick estate that handles film adaptations and the licensing of materials, said, “In my mind, there is a very obvious connection to my father’s novel.”

Carolyn Penner, a spokeswoman for Google, declined to discuss any names that might be used to market a Google phone. Google hasn’t confirmed that it will actually sell a mobile phone, but on Saturday it disclosed that it was testing one.

If you want to see the compliance report Google submitted to FCC visit this link:

https://fjallfoss.fcc.gov/prod/oet/forms/blobs/retrieve.cgi?attachment_id=1208732&native_or_pdf=pdf

Hardware specs:

Earlier this month, the rumor about Google smartphone became stronger and it further got momentum after Google published a post on Google Mobile blog on December 12, 2009, which said that Google had given a new smartphone to its employees for testing. On December 13, Cory O’Brien, a San Francisco-based blogger, published a picture of the phone on his Twitter blog. This was followed by a news report published on thesearethe Droids, which revealed the hardware specs of the Nexus One. Famous tech weblog, Engadget, also published pictures and posted a video clip of the phone’s boot animation. The Google Nexus One handset is produced by HTC. Recently, another blogger named tnkgrl, published the specs of the phone-

• Design: The phone is very thin and looks better than in picture and it is unlocked and it is faster than Motorola Droid.
• Processor: Snapdragon processor with a clockspeed of 1GHz.
• Memory: 4GB microSD card.
• Screen: 3.7-inch AMOLED screen with same size and resolution as the Motorola Droid. The homescreen is divided into five panes.
• Multitouch support: No multitouch support in the browser or Google Maps.
• Network and calling: Quad-band GSM/GPRS/EDGE with UMTS/HSUPA. There will be no 3G on AT&T (EGDE only) but it supports 3G on T-Mobile network. There is no VoIP support.
• Wireless communication: 802.11b/g Wi-Fi, Bluetooth 2.1 + EDR
• Camera: It has a 5 megapixel camera and the same camera interface found on Motorola Droid but there is no dedicated camera key and the trackball can be used to focus and the flash is weak.
• I/O ports: micro-USB connector for data transfer and power. Tnkgrl also mentioned of “gold contacts” at the bottom edge of the phone. The camera can operate decently in lowlight.
• OS: Android 2.1
• Battery: 1400 mAh

Unlocked and unsubsidized but low priced!

This issue is the major source of all the hypes and hooplas about this phone. Many news reports said that Google would directly sell the unlocked and unsubsidized Nexus One. Previously, there were unlocked phones like Nokia N95 and Nokia E71 but those phones were very much expensive and for this reason, they could not become popular. If Google does the same thing then the Google Nexus One might not stand a chance.

Many tech analysts and business analysts assumed that Google will subsidize the Nexus One phone with its advertisement. Already, Google has a major search engine advertising business. itbusiness.ca says:

Conceivably, the firm could offer its phone at a price comparable to a subsidized phone from a carrier -- as long as customers agree to receive mobile ads on the devices.Since advertising is central to Google's revenue model, that approach might make some sense, analysts said.

Another major problem with using unlocked phone in the U.S. is that the U.S. government offers “two incompatible radio standards on three different spectrum bands.” It is not possible for one unlocked phone to run on all three networks. If a phone works GSM carriers including T-Mobile and AT&T then it would not work on Sprint and Verizon because these two CDMA carriers have their own internal control that will block unapproved phones.

Network vs. Google Voice:

There were news reports that Google will release the Google Nexus One phone on a GSM based carrier-either T-Mobile or AT&T. There were other news reports saying with the Google Nexus One phone, Google will venture into telecom business. It would be the first phone that will break the carrier domination in the U.S. telecom sector. Google has every reason to move away from network carriers because they control the content of smartphones and obviously Google does not like it because the carriers can modify its software that would allow Google to gather data from handsets and sell ads.

Till date, telecom carriers in the U.S. subsidized phones and sold them at a lower price but users were bounded by various conditions. Google Nexus One will give buyers the opportunity to choose whatever carrier they want. Google would route all calls as VOIP through Google Voice, a new service Google started in March this year. The carriers will not like it because they would lose their revenue and go out of business. Post-Gazette.com reports:

……..Google Voice, which the company obtained when it acquired Grand Central. But Google Voice, while it's got a lot of great bells and whistles, is unreliable. I've heard about a lot of happy users -- but just as many unhappy users. According to Global Grind, Google Voice has about 1.5 million registered users, but only 580,000 of them are active. I suspect that will change as Google Voice matures and improves.

The Google strategy is disruptive in a big way. It has tightly linked Google Voice to Android, substantially enhancing the phone experience for anybody who has both a Google Voice number and an Android based phone, such as the Samsung Behold or Motorola CLIQ (both on T-Mobile) or the Motorola Droid or htc Droid Eris (both on Verizon Wireless).

Another option is, Google Nexus One can be sold by a carrier and Google would buy data services in bulk and resell them to customers but the carriers would then raise the cost of data service as customers are buying them without any “voice plan.”

Will Google Nexus One phone destroy Android?

If Google releases the unlocked Nexus One, subsidized by its advertisement program, it would irk handset makers, especially the members of the Open Handset Alliance, whose formation was led by Google. The market share of Google’s Android OS is very small but it is on the rise. The Google Nexus One runs on Android 2.1 which is far better than the Android 2.0.1 that is currently used by Android handsetmakers. Google is supposed to share its invention its OHA members but it did not do so. An article on The Huffington Post quoted a news report saying Google separately designed the software that would be running behind the Google Nexus One. If this proves to be true then Google would become a rival to the handset makers who are producing Android based handsets and they would leave Google and OHA and forge partnership with Nokia who also offers the free Symbian OS or Microsoft’s Windows Mobile that is in a poor shape now.

Handset makers have a lower revenue margin. Their business can be affected by various causes including supply shortage of machinery parts, over production etc. Smartphones are high-end phones running on powerful hardware. It is not the hardware that makes the difference for smartphones but the software. So, handset makers like HTC, Motorola, Samsung would always like to differentiate themselves from one another. For example, Motorola sells its customized user interface as “MotoBlur” but HTC sells it as “Sense.” Google Android is an open source software and anybody can get it for free and modify it. Such differentiation already created serious fragmentation in Android market. With Google entering the market with its own phone and own version of Android, would further increase this fragmentation and could pose a major threat to the growth of the Android App store aka the Android Market, which is still very small but enjoying a sound growth for sometime. As of today, the store has a collection 20,000 apps which was only 10,000 in September.

Charlie Wolf, a financial analyst for Needham & Co., wrote a report titled, “Google’s Android Takes Center Stage”. In this report, he talked about the affect of this fragmentation on Android Market. He said:

Unlike the iPhone where a software application can be written once and run seamlessly on all versions of the iPhone, most software applications written for Android have to be customized for each smartphone. This limits the addressable market of an application to that of an individual smartphone rather than the Android platform itself,"

Google Nexus One vs. iPhone:

Another issue that created lots of buzz regarding the Google Nexus One is that whether this new device would be able to emulate the success of Apple iPhone? Well, there is no sure shot answer to this question. Apple and Google has their own strength and weaknesses.

First of all, Google is a software company more precisely, an Internet company and does not have any connection with hardware business. This is its major weakness but Apple’s big advantage. Apple has a strong hardware background which helped it to design a smartphone like the iPhone and it can control the entire customer experience of the phone. Google Nexus One is produced by Google’s hardware partner HTC, a Taiwanese handset maker and a member of the OHA. Apple iPhone’s main weakness is that it is subsidized by AT&T; meaning, the carrier has control over its content.

I have already mentioned that Google phone subsidized by a network would not go down well with the search business of Google . If Google had devised some way to directly sell the Nexus One phone, not subsidized by any network carrier, then it would have really posed a major threat to Apple iPhone. I do not know whether it is possible or not because to do the mobile operators would go out of business.

TARANFX published a chart comparing the hardware specs of the Apple iPhone and the Google Nexus One. Let’s take a look at it-

An article on Engadget talked about Droid phones in the U.S missing multitouch API features like pinch to zoom for net browser or Google Map or touch enabled keypad. The article mentioned that Apple have about 300 patents (this article was written in November, by this time, the number might have increased) and this might be stopping Google from giving out the multitouch features on its products released in the U.S. However, the UMTS version of the Verizon Droid which has been sold as Milestone in Europe has multitouch features. So, what does this mean? Is Google afraid of a legal tussle with Apple or the two companies have somekind of understanding regarding not giving out multitouch features on Android products?

Regarding the app store market, the Apple App Store has all the advantages over Google Nexus One phone. The iPhone is the top selling smartphone in the U.S., the biggest market of smartphone by far in the world. When Apple announced to start its own app store, it was natural that large number of third party application developers swarmed in to curve their own niche. Apple started its app store in 2008 and it was not so sure that it would be so successful. There was no other app store at that time in the market. In April 2009, the Apple App store observed its one billionth software download. Looking at the enormous success, Apple’s competitors opened up their own stores.

Google started its Android app store called Android Market in October 2008. It is not so successful like the Apple App Store but it is going there. In November, Android market reported to have a collection of 20,000 applications which was only 10,000 in September. Compared to Apple App Store’s 100,000 applications collection, this number is very little but it shows the potential of the Android app market. More and more handset makers are adopting the Android OS. Carriers are now showing great interests in Android run smartphones. Motorola Droid, the latest Android based smartphone produced by Motorola is being sold on Verizon's network and it has been very successful. The Verizon Droid ad played a major role in raising awareness about Android based smartphones among smartphone users. Android has a bright future ahead but it also has to overcome a big obstacle.

As I have mentioned earlier, the Android OS is a open source software and handset makers modify it in order to differentiate their products from one another which led to a fragmentation in the Android phone market. This means, third party application developers for Android would have to produce several versions of their products in order to run smoothly on various Android based phones. If Google comes in with its own version of Android, the fragmentation would further increase and would discourage third party application developers to develop products for Android based phones. If Google really wants to catch up with Apple App Store, it will have to stop this fragmentation of the Android market.

In the end, I believe that it would be very good for Google if the company does not try to stir up things. I do not hate Google and honestly I liked the ideas and assumptions I have come across on Google Nexus One. If all of them comes to be true, it would usher into a new era for the American tech industry and telecom industry with Google be leading the pack but that victory would come at a very high cost. The handset makers would get upset over Google releasing its own phone with its own software which it was supposed to share with them. The carriers who are currently selling Android based phones would get upset if Google tries to hurt their business. Meanwhile, News Corp., one of the leading media companies of the world, is asking for money to present its content on Google search result and placing ads near them. If News Corp. becomes successful, others would follow and Google’s search engine ad revenue would severely diminish.

For Microsoft, one of the arch rivals of Google, all this is a blessing. The software giant has been trying hard to get into the search engine business but failed to do so. It is now planning to strike a deal with News Corp. under which the media company would display its contents on Bing search results. If Microsoft can do it, it would also change the whole picture in the search engine industry forever. In simple words, this is a critical situation for Google and should decide carefully which path to take because any mistake could cause huge financial loss to the company.

Related articles:

Engadget

tnkgrl

All Things Digital

Fortune Brainstorm Tech

MSNBC

PC World