Blog Post

Google Links Up With Verizon to Fight Apple

gigaom_icon_google-android2Updated with detail from the conference call: Verizon (s vz) and Google (s Goog) today said the carrier plans to launch Android handsets sometime in “the next few weeks,” and that the search giant will create Android-based devices preloaded with apps that will run on Verizon’s network. Straight off its snarky ad campaign attacking Apple’s iPhone, it looks like Verizon will finally offer consumers the type of next-generation mobile phone operating system and experience that have been available on AT&T (s T) and T-Mobile for more than a year. Meanwhile, Google gets a large carrier partner that can help it win over market share for Android.

Android By the Numbers
9 Android-powered devices with 32 carriers in 26 countries and 19 languages.
T-Mobile has the most Android phones. Sprint, and Verizon Wireless are the new additions.
All major handset makers have plans for new Android-powered phones, including: HTC, Samsung, LG and Motorola.
Android Market has more than 10,000 free and paid apps.
Users download about 40 apps, on an average.
Android 1.1 featured Search by Voice.
Android 1.5 came with an on-screen soft keyboard, video recording and easy uploading to YouTube, and widgets and live folders on the home screen.
Android 1.6, has a Quick Search Box to search apps, contacts, browser history, and the Web.
Source: Google

Verizon may be late to the party, have lame handsets and an expensive service, but I’m super excited about the news because I can’t wait to see the type of functionality that Motorola (s MOT) is offering with the upcoming CLIQ phone and Blur service via T-Mobile over at Verizon’s solid network. However, there are a few questions I want addressed at a webcast due to start within the hour. Verizon says the upcoming devices it will develop with Google will come pre-loaded with apps. What about the Android Market, will Verizon bump that in favor of its own app store? How will Verizon and Google share revenue from app sales? Plus, will Verizon allow Google to brand the phones it sells like T-Mobile currently does?

Also, how might this tie into the $1.3 billion in investment funds aimed at driving both devices and applications on Verizon’s network? That’s a lot of money, and spending that much on applications would be pretty difficult. However if that’s going toward device development, things may get interesting. With Android, a device maker isn’t limited to phones. So it’s possible that the company that’s brought out a revolutionary wired broadband product in FiOS is about to bring something just as game-changing to the wireless world in terms of a form factor and experience. And if it helps Google gain mobile device market share at the expense of Apple, that’s probably worth teaming up with one of its carrier frenemies.

Update: The press conference is over, so here are the tidbits you guys are waiting for. Yes, Android’s Market will come pre-loaded on Verizon phones, and Verizon will spend money marketing Android Apps and devices to its 85 million subscribers. Two new Android phones are expected within the next few weeks, with more coming in 2010. For those following the travails of Google Voice on the iPhone, Verizon says that it plans to ship its first Android device with Google Voice. Lowell McAdam, Verizon’s president and CEO, said that none of this is a response to the FCC’s net neutrality push but rather a smart business decision that was begun almost a year ago when Verizon execs met with Google to discuss Android.

Google’s CEO Eric Schmidt was on hand to both praise the Verizon network and to say he was “enormously surprised” at the level of openness Verizon was willing to embrace with regard to bringing Android devices to its network. The backhanded compliment aside, the two executives were cagey about how much money and emphasis Verizon will allocate to Android at the expense of other operating systems and handsets. While the execs said the companies would share revenue, they wouldn’t offer a breakdown of what that rev share would look like.

On the device side, Google doesn’t plan to actually build any Android deices for Verizon’s network, but will work with partners to find the best form factors beyond handsets. As for me, I’m still wondering if we’re going to see Android move from Verizon’s wireless devices to customer premise equipment made for Verizon’s wireline networks. Might we see an Android-powered FiOS set-top box or the Verizon hub running Android? This inquiring mind still wants to know.

24 Responses to “Google Links Up With Verizon to Fight Apple”

  1. Verizon may be the largest wireless company in the U.S., but it doesn’t have a killer phone. That may be one of the reasons it decided to join forces with Google to create some brand new additions for the Android armada.

  2. Verizon doesn’t make handsets. Google doesn’t make handsets. This “alliance” makes for good news but it’s business as usual, as far as I can see. Handset makers will have to make phones and incorporate Android onto the device. Not Verizon, not Google.

    Handsets produced going forward are not going to be any different than Android handsets released prior. This is just a good excuse for the two companies to get on the stage together and make nice.

    • Nope, James. It’s much bigger than that. This deal is disruptive, or at least a major disruption. It has been forced by the successful and exclusive Apple-AT&T deal (which DC thinks is stifling competition, when it’s actually forcing it.)

      While it is the handset vendors that put on the OS, it is the carriers that decide what OS phones they will buy, and thus which will reach mass markets. Android needed a big carrier (in any given market) to make it significant. It seemed likely Android would persevere, but not certain. Now it’s a certainty.

      Verizon, I might add, is the tightest screw to ever walk a turn on an SS7 network. They are not known for openness. However, the competitive pressure of Apple-ATT has forced them to work outside their comfort zone. I love real competition! While the tight RIM-VZW relationship has offered some compelling enterprise smartphones, VZW is eating it in the rapidly growing consumer smartphone market. ATT is smart-pwning them with the iPhone. So where can VZW turn? They need something that will appeal to consumers, have a touch-based interface, powerful UI, be of modern architecture… The choices are WebOS, Symbian, WinMo, Linux, Blackberry, or Android.

      Symbian is too legacy-driven and too euro for VZW; WeOS lacks vendor support, is too much of a gamble and Sprint is already all over it (VZW will do it, but not bet the farm); WinMo is still caught in 2003, Linux has many variants each lacking scale, and Android has the backing of major content brands, mass developer support, proven success, and a wide range of handset vendors backing it. Hmmm…which to choose.

      If there had been ANY other decent choice, you wouldn’t have seen Schmidt and McAdam sharing a stage. Some of the other comments are right, the relationship will be tough. Google will force VZW open with a crowbar, much as Apple has done to AT&T. The carrier will lose control of apps. Lose control of the store. Lose control of the kinds of services that run on their network. They will cry, they will rally, they will rant. But they will also see increased sales, increased data traffic, increased usage of their device, increased fixed-mobile substitution, and happier consumers. Oh, increased revenues…does that matter? It’s the “rising tide floats all boats” argument.

      So, while this tie-up will hurt them culturally, it will help them financially. It will drag them kicking and screaming into the open era — where they will like what they see. In a world where carriers are just a pipe, they can still be a smart pipe. And what’s more, the carrier with the best pipes has an advantage.

  3. Karl Bode

    “What happens when Google’s apps start to threaten Verizon’s profit pools? Verizon didn’t just change their stripes, you know. Culturally, they aren’t a match for Google’s openness approach. They may be attracted by the dollars that Android brings, but they’ll be kicking and screaming all the way as Google attempts to tear down their walls.”


  4. Verizon is all about Verizon and Google is all about Google. I seriously doubt this “partnership” will stand the test of time. The dunces at Verizon have no idea that they were much better off partnering with a well-behaved and predictable “Apple” rather than a schizophrenic maverick like Google. It won’t be long before Google introduces some feature at the expense of Verizon like they did with their “partnership” with Apple that attempted to replace the whole user experience on the iPhone for phone calls. Google wants an open platform to sell Google services, competing directly with Verizon.

    This relationship is doomed.

    • I disagree – Verizon is all about MONEY.

      When the decision makers at Verizon see the massive cost savings of Android ( zero licensing fees ) a couple of fiscal quarters from now, they’ll be jumping for joy.

      Millions saved not paying for mobile OS licenses, which I think Om said was something like $2 per handset, will make the suits and bean counters at all the carriers the world’s biggest Android cheerleaders.

      • While I agree Verizon is attracted by the money, it doesn’t mean this relationship will be successful. What happens when Google’s apps start to threaten Verizon’s profit pools? Verizon didn’t just change their stripes, you know. Culturally, they aren’t a match for Google’s openness approach. They may be attracted by the dollars that Android brings, but they’ll be kicking and screaming all the way as Google attempts to tear down their walls.

  5. Verizon CEO Lowell McAdam: “Yeah, I guess we do [ support Google Voice ]. You either have an open device or you do not.”

    Much larger issue at hand here – We’re seeing the implosion of the telco cabal, where there was once collusion, now there is choice.

    It’ll be a while before the implications of this a realized, but the above quote, in the context of Apple ( read: AT&T ) rejection of Google Voice, shows that open source beats closed, proprietary code EVERY time, without exception.

  6. PXLated

    I must chime in whenever I see stuff like this… “Verizon’s solid network” …
    It’s not that solid in MN (voice or data). And, their network has never been tested with a good “data” phone. My guess is it may not hold up much better than AT&T. Time will tell.
    Of course with any carrier the results are location specific.

  7. this is great for me. i sell used computer and lately cell phones. my phone are almost exclusively used on CDMA carriers that allow for ‘flashed’ phones originally sold from other carriers such as cricket, metroPCS and pageplus.

    once these phones show up on the used market i imagine they will be very popular with my customers. at the moment it is nearly all total frustration that they can not get a cheap prepaid SIM with data for GSM phones. and sprint phones are often hard to ‘flash’ over to other carriers.