Here’s what we still don’t understand about Google’s Google Phone (Nexus One) strategy: How is Google planning to deal with the obvious partner conflict?
By most accounts, the Nexus One is a better phone than the “Droid” that Motorola and Verizon are currently spending untold amounts of money advertising. The Motorola and Verizon advertising is unquestionably helping Google, by selling Android phones and raising awareness of Android. And now Google’s distribution of its own phone to employees has completely stolen the thunder from the Verizon ad campaign.
All anyone wants to know about right now is what the Google Phone does. And it apparently does a lot.
To draw analogies from the past, the smartphone war looks a bit like the personal computer war in the 1980s. One group of companies, namely Apple, bet on an integrated solution, hardware plus software. The other group, led by Microsoft and IBM, bet on a single software platform spread across a wide variety of hardware vendors. We know who won that war.
Having a common software platform in PCs allowed developers to coalesce around a single standard. This reduced Apple to a niche player and built Microsoft the world’s most valuable company.
Fast forward to today.
In smartphones, Apple and RIM are following the Apple strategy: integrated hardware and software. Google, Motorola, HTC, et al, meanwhile, are following the Microsoft/IBM strategy, spraying a single software platform across multiple hardware vendors. The power of the latter strategy gives Google a chance to do to Apple what Microsoft did to Apple in the late 1980s and early 1990s: Come from behind and stop the world from standardising around the Apple platform. Given Apple’s app lead, this will be challenging. But given Google’s power and the excitement around Google’s Android, it won’t be impossible.
But now Google has gone and thrown a wrench into the works. It has decided to compete not only with Apple in a bid to become the standard software platform but ALSO to compete with its own partners in a bid to sell hardware. In short, at least for now, it is following a new playbook, one in which it appears to be trying to have it both ways. The PC analogy would be if Microsoft had started selling Microsoft PCs that ran Windows while also distributing Windows to IBM.
If we were Verizon or Motorola, we would be furious that our advertising was helping to build up a huge market for the Google Phone. We would understand that, if Google manages to have it both ways, the profit potential for both hardware vendors and carriers will be vastly reduced. We wouldn’t be happy about that.