Blog Post

Google's Web Store Is Today's Mobile Disruption

Stay on Top of Emerging Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

First off, forget the phone. The big news out of Google (s goog) today wasn’t the shiny new Nexus One, but the web store that the company created as a way to get a certain class of Android devices it calls superphones into consumer’s hands and regain some control over its open-source OS. That’s right, the phone may be sweet, but the business disruption today came from the channel.

With its web store Google is trying to create a top tier of Android devices and a way for it to control the user experience for the operating system — currently a challenge for the OS, especially when it’s compared with the buttoned-down iPhone ecosystem. If Google sets the bar high enough for a phone to be listed in its web store, the consumer knows that handset meets a certain level of quality.

That will help deal with the complaints about apps not working correctly on the device because the Android platform is too advanced for older hardware, and other issues that are keeping Android gadgets behind the iPhone in the user experience category. Andy Rubin, VP of engineering at Google, today at an Android press event defended the difficulties with the older hardware, saying that backwards compatibility between the hardware and software for mobile phones would stall innovation.

He kept repeating that the Nexus One is like his laptop from four or five years ago, a machine that wouldn’t run today’s version of Windows, he pointed out. Maybe, but the initial Android phone was released only a year and three months ago.

Sanjay Jha, the co-CEO of Motorola (s mot), which is a Google partner building Android handsets, told me after the event that Motorola won’t focus solely on designing handsets for the high-end users that Google appears to be targeting with its web store, but will instead target a range of consumers with a variety of Android handsets. He stressed that Google’s Nexus One and the store itself are trying to serve a particular audience segment. But Motorola won’t abandon Android.

Jha wouldn’t answer questions on how revenue would be shared (if at all) between Motorola and Google for Motorola devices sold through the Google web platform. The Motorola Droid is listed as part of the Google web store, but consumers actually have to go to the Verizon (s vz) web site in order to pick it up. Is this because Droid doesn’t make Google’s grade?  Rubin said that more operators and devices will be showcased on the store soon (including the upcoming Nexus One for the Verizon network coming in the spring).

Andy Rubin with Motorola CEO Sanjay Jha at Mobilize 09

However, Jha’s seeming nonchalance over questions about how Motorola felt about Google taking such an active role in designing hardware was belied by his late arrival at the event (he blamed traffic) and his rapid exit after the press Q&A ended. I saw HTC CEO Peter Chou answering questions for more than an hour, whereas Jha was gone 10 minutes after the questions ended.

My guess is the Google phone will be less disruptive to the carriers, but a real problem for the handset makers which are already seeing their profits erode. But if Google helps make the store into a place where consumers can make sure their Android device can run the apps they want to use, it will likely win.

11 Responses to “Google's Web Store Is Today's Mobile Disruption”

  1. The current situation is Mobile devices are stable and mobile services are evolving. Innovating needs to happen for consumer experience to make the Mobile disruptive in the marketplace. My take is that Every entrepreneur or product strategist needs to think about Mobile powered services to deliver value added services, social commerce, mobile advertising and entertainment to consumers. It is time to watch the trends to see who is going to be the market leader.

    Thanks for sharing your insights.
    Sharing my article I just wrote on Mobile :

  2. Tariq Ashraf

    … Since I live in France, I cannot check Google’s Store buying process, can someone enlighten me?

    I am guessing that one would go to the website, choose the model one wants, and then the Carrier, right?!

    Should Google establish a new retail channel/storefront for Phone and Plan subscription… MNO’s last bastion would fall: their retail distribution network… in Europe, MNO Retail location footprint expansion war has been on for quite some time (Licensed & Franchise location, fully owned, Partnerships etc…)

  3. Something that intrigues me is – who gets to choose the 3G bands – carrier or handset manufacturer. It is just another band and can easily be integrated to ONE device but I feel the carriers should pay the handset manufacturer to even include their 3G support (like what Apple and Google did to each other’s GSM network).

  4. Stacey wrote: My guess is the Google phone will be less disruptive to the carriers, but a real problem for the handset makers which are already seeing their profits erode.

    I disagree. I doubt that Google’s aim in selling phones through its website is to erode the profits of the handset makers. I doubt that Google is taking a big cut (if at all!) of handset margins.

    The real disruption is that Google wants to have a big say in the features and quality of the phones it sells through its website. These features were historically held back by the carriers, not the handset makers. This is where Google could cause heartburn to carriers, rather than handset makers.