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).
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.