Original URL: http://www.theregister.co.uk/2010/01/06/google_nexus_one_revolution/

You and what Android? The Google iPhone killer that isn't

The Mountain View hippies just ain't hard enough

By John Lettice

Posted in Mobile, 6th January 2010 15:49 GMT

Comment So is it the Google phone or not? In the Nexus One, Google has produced something rather like an iPhone, something that in some senses may seem better than an iPhone, but something that in hardware terms is an iteration rather than a game-changer. But does Google, the company that wasn't going to do hardware, now do hardware? That's one of the more interesting aspects of the rollout.

Nexus One

Google's VP of engineering for Android, Andy Rubin, was denying that Google was building hardware last autumn, and was denying it again - or still - at the Nexus One launch yesterday. How he denied it, in an interview with gigaom, is worth noting. "Google isn't building hardware… We are not designers and there are no hardware or industrial designers on my team." And, he told the audience at the launch, "I'm very precise when I talk. I said Google will not build hardware… We are internet and software guys and we know how to do that quite well and I think we’ve contributed back to the ecosystem."

For someone who's being claimed in some circles to be doing hardware, that's pretty categorical. He's not running any hardware or industrial designers, and Google will not build hardware. If it were Google's intention to be building more hardware, then would not Rubin be trying to claw his way out of this hole, rather than tunneling harder? We could also quote the Nexus One terms of sale here (notice it's effective from 17 November?): "You agree that Google is not the manufacturer, but the seller, of the Device. You acknowledge that HTC is the manufacturer of the Device and provides the Limited Warranty for repairs and service of the Device."

The killer product versus the ecosphere

Whatever, I've no intention of either agreeing with Michael "the Googlephone is real!" Arrington (who's probably got away with this one whatever anybody says), or with those who point out - with some justification - that it's really just another, better, Android handset with an impressive amount of Apple-style prelaunch hype and wishful thinking. Doing hardware is not necessarily an either/or, and Google is quite likely somewhere in the middle, in a somewhat conflicted position.

Google's ability to influence the design of Nexus One was somewhat greater than was the case with previous Android handsets, because it commissioned it directly from HTC rather than working through a third party network or manufacturer. But as Rubin says, the designers work for HTC; in principle, Google hasn't done anything that another company couldn't do with an HTC contract and Android 2.1. Nexus One is at this precise moment somewhat unique (but not hugely), but assuming Google isn't going to burn off its Android partners permanently (not this year, anyway), it won't be unique for that long.

Compare and contrast with Apple and the iPhone. Apple exerts a positively psychopathic level of control over its products, and in Steve's second coming its quest for stand-out perfection has been massively successful. And Apple does not care whether or not you agree with its vision of perfection - it thinks you'll buy the gear anyway, and so far, this time around, it's been right. Apple focuses absolutely on the device to be launched, and incidentally locks down the company tighter than North Korea while it's doing so, as opposed to handing the damn thing out to all the staff the month before the rollout.

Note to Eric: the consumer electronics business is not kind to hippies.

'Hey, the phone's no big deal'

Andy Rubin clearly doesn't go for the Apple approach: "People shouldn't focus too much on the device. What's more important is the strategy behind the devices." Oh no Andy, not if you're in the consumer hardware business. Sure you have a strategy that underpins it all, but if you don't focus on the device, you'll get into all sorts of trouble. Even if your main competitor isn't a maniac.

Now compare and, er, compare with Microsoft. In pretty much red-lining building hardware for Google, Rubin is getting the company into the kind of position that Microsoft has repeatedly found itself in - and not just with Windows Mobile. Microsoft has specified hardware and produced design guidelines for hardware manufacturers over the years, but has never gone the whole way, the rationale being that building a whole PC (or less happily, Windows Mobile) ecosystem with a large number of partners makes better business sense. Plus, if you're producing the underlying software for that whole ecosystem, your partners are going to dump you if you start competing against them.

But lack of absolute control is a vulnerability when you're going up against companies that do have absolute control. They can do single, stand-out headline-grabbing products while you do ecosystems and the tyranny of choice. And as hardware becomes progressively consumerized, not being able to do those stand-out products becomes more and more of a vulnerability for you. So by ruling out hardware Google may be setting itself up as Microsoft 2.0. And not in a good way. Google has done a stand-out product that isn't particularly stand-out, and Rubin is making it difficult for it to come back for another try while retaining any crediblity.

Hell, Rubin even said "ecosystem." And what about that ecosystem, and the whole "strategy behind the devices"? That is the "store", rolled out in a very basic and Googlish kind of way. Now, you may disagree, but it seems to me that this is a store, and this is a store, or even that this is a store (but not as good as the other two). That, on the other hand, is merely a page selling one product.

But apparently it will become the future. Google, Rubin tells Om Malik, is going straight to the Google customers, and proposing a strategy that "could fundamentally change the way people buy cellphones." The Nexus One page is, apparently, a Google-hosted web store a "new consumer channel to provide an efficient way to connect Google's online users with selected Android devices."

But at the moment the page new consumer channel has one device and one carrier prepared to offer the phone on contract (for $179, or $529 without), and two more (Verizon in the US and Vodafone in Europe) to be added in "spring 2010".

The stuff about going straight to the customer and revolutionising the cellphone sales business is perhaps not as straightforward as Rubin would have us believe. It has been possible to buy cellphones on the intertubes for some time, without the help of Google, and it has also been possible to buy cellphones without contract at humungous expense without the help of Google. It might simplify matters if you could go to the one site, pick the a piece of hardware and sign up with the a carrier from a list of participants (a bit like carphonewarehouse.co.uk, but it's not obviously revolutionary.

If Google did succeed in establishing a marketplace where multiple networks would compete on hardware, price and Ts & Cs, then yes, it might well revolutionise how cellphones are sold in the USA, but at least three networks don't believe that Google is going to be able to do this, otherwise they wouldn't be setting themselves up to be sheared in a price war with Google as referee.

Where the page store is different, and very helpful to Google if it succeeds, is in its positioning of Google as the sole merchant for the Nexus One. As is the case with practically everything Google these days, in order to buy it you need to have a Google account, and you need to sign up to Google checkout, with Google retaining a bunch of personal information which "is stored in association with your Google account."

This isn't massively different from the kind of data Amazon and other stores keep, but you can see how useful it would be to a company with Google's footprint and ambitions to convert the rather doubtful personal data it has for Gmail sign-ups to the genuine information that you get if you're running a successful web store. Amazon only tugs at your sleeve if you're visiting Amazon, but Google could do it practically all of the time if it wanted. And as it aims to be able to decide what you're looking for before you know you're looking for it, it quite possibly does want.

But Google being able to do this depends on it building that successful web store, and winning a significant slice of the mobile phone market for Android. So shall we just itemise what it has achieved so far? It has (possibly not even deliberately) won a truly impressive quantity of hype for what a number of people who should know better expected to be a game-changing product. It has rolled out a product that seems a credible competitor, but that is not particularly revolutionary in terms of performance, price or carrier relationship.

And it has largely got away with that. The pundits will not be so kind next time round, if there is a next time round. Nor will the company's Android partners.

It has also rolled out something it claims could fundamentally change the way people buy cellphones, but which is actually much more a case of Google trying to hug even more of your data even closer to its chest. And as Rubin says, he hopes he can sell at least 150,000 handsets. Not the sort of lowball number that going to knock out the iPhone, far less change the mobile market, and not the sort of number you'd expect from a company that was serious. About anything except collecting your data. ®