Google Phone May Be Much Ado About Nothing

The Nexus One, AKA "the google phone"

A hailstorm of reports came out over the weekend after Google (NSDQ: GOOG) gave its global workforce a cellphone. Reports quickly concluded that this provides confirmation that the search company is indeed building a branded phone of its own.

But now, a number of naysayers are questioning whether this is actually true, or whether this phone represents business as usual for all parties involved. Google provides the Android software; HTC builds it and T-Mobile USA sells it — we’ve heard that before. Google could easily clear up the matter, but why bother? They are loving all the attention they are getting for a phone that is not even for sale yet.

Just for some context, the rumor has been around for years. GigaOm reported almost exactly the same thing three years ago to the day that “Google might be working with HTC and mobile/telecom giant Orange to build a Google Mobile Phone.” Although that was floated even before Google released the Android operating system, it goes to show how long people have been using the words “Google phone.” (Coincidentally, that headlined was reported by GigaOm today in a story about the top stories over the blog’s eight year history — showing how popular the subject has been for three years.).

Here’s more evidence that the phone — being called the Nexus One — is just another device running the Android operating system, and nothing more:

Unlocked vs. Locked: On Monday, Reuters said Google plans to sell both an unlocked version and a locked version of the device (via T-Mobile USA), as if that provides evidence that this is a Google phone. However, unlocked versions of the T-Mobile G1 and T-Mobile MyTouch have been for sale before, reports Leslie Grandy, a former T-Mobile exec, who writes for a blog under the name “Gearheadgal.” She wrote that they are available through the official Android Developer website, but those sales never put a dent in T-Mobile’s official sales. For Google to sell the phones directly to consumers, doesn’t make a lot of senseto reach broad adoption: “They will need a reseller partner or retailer who can manage fulfillment, returns, insurance and warranty of the hardware, something that has taken Apple (NSDQ: AAPL) years to develop for themselves.”

Non-carrier specific phone: By now, we know that the Nexus One is capable of running on T-Mobile’s U.S. network, and also on some European networks, but not AT&T (NYSE: T). But the idea that the phone will be carrier independent and work on the four major U.S. carriers is virtually impossible, reports PCmag.com. First, a chipset that supports all four carriers has never been done, but even if it is possible, it wouldn’t matter. While it’s possible to support both T-Mobile and AT&T in one phone, Sprint (NYSE: S) and Verizon can actually lock out unapproved devices. It would also be prohibitively expensive, and without a particular carrier subsidizing it, consumers will likely pass on paying $600.

Alienating its partners: One reason that Google is not likely doing a phone is the risk of killing the ecosystem that it just started building around Android. The point was brought up on in the same WSJ story that reported the Google phone news. As of October, nine Android devices had been announced with 32 carriers, and some of those companies are likely to be “ticked off” by Google building its own phone, said Charles Golvin, a wireless industry analyst with Forrester Research.

So, does this mean that Google is not releasing a phone of its own? We’ll have to wait and see.

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