[image url="http://static.businessinsider.com/image/4b26a4b90000000000af5fe8/image.jpg" link="lightbox" caption="" source="" alt="Google Phone Dream" align="left" size="xlarge" nocrop="true" clear="true"]
It’s about Google wanting to take control over the way you buy mobile phones — the device and the service — disrupting the entire mobile industry in the process.
Specifically, Google wants to flip the mobile carrier and distribution market upside-down, becoming the place you go to search for and buy a mobile phone — before you even pick a carrier, number, voice and data plans, or extras.
At least that’s one theory I’ve come up with after an IM conversation with MediaMemo’s Peter Kafka, who first reported Google’s link-up with T-Mobile yesterday for this first Google phone. (To be clear, this is a work of speculation, not Peter’s reporting.)
Here’s how it might work:
- When you want to buy a new phone, you pull up Google, and browse the devices they have for sale. For now, it’s the HTC Nexus One — which, sorry gadget nerds, doesn’t look all that fantastic to us — but it could be a variety of Android devices from manufacturers like Motorola, LG, Samsung, etc. Or maybe even non-Android phones.
- You order the phone. (For now, probably unsubsidized… which is expensive.)
- It ships to your house and you boot it up. After a nice welcome video, you get a screen asking you which carrier you’d like to join up with.
- Depending on the phone’s radio technology, it could be any combination of AT&T, Verizon, T-Mobile, Sprint Nextel, or local carriers. There may even be a bidding process. Verizon could compete with AT&T for your business based on what kind of package you want — data only, data and voice, unlimited calling, text messaging, etc. Or Google could even be your “carrier” and buy wholesale access to voice and data networks.
- You could get pay-as-you-go service turned on, or get a credit to your account for signing a long-term contract. Maybe Verizon would give you a $200 service credit for a 2-year contract, or credit your Visa card. Or maybe carriers could compete here over “signing bonuses.”
- Google may offer you an extra credit to make Google your default search tool.
- You could also pick your number through this sign-up process, and even select to make Google Voice your primary voice technique. Google’s installer would configure your phone automatically.
- You’re good to go. You haven’t had to leave your house, go into a crummy phone store, wait in a line, or talk to anyone. Nerd heaven!
This as opposed to the current mobile phone-buying model, which basically means going to a store — probably the carrier you already use; waiting in line; looking at plastic dummy units; and signing up for service.
There are obviously a lot of hurdles between today’s model and this potential Google model.
The biggest hurdle would be convincing carriers to give up power to Google over their handset sales pitch. We don’t like to say “never” very often, but it just doesn’t seem like something Verizon would ever want to do.
Would it be better for consumers? Probably! Is it likely to happen? Probably not, unless this is something the government can force the carriers into supporting, while it’s already taking a sceptical look at the level of competitiveness in the U.S. wireless market. (Especially if Apple or RIM could establish a similar model.)
What’s in it for Google?
- More Android sales, probably, which could mean more mobile Web usage and more mobile ad activity.
- Perhaps more Google Voice activity, which Google could eventually monetise.
- An opportunity to further disrupt the telecom industry. (Google would love nothing more than for every telco to become as dumb a pipe as possible.)
- Some margin from selling the phones — whether a bounty from carriers, like Amazon gets, or a retail markup on wholesale prices.
- And a much bigger foot in the mobile industry, much earlier in the sales process.
What are the odds of this happening? Probably pretty low. But it could be one of the many things that Google might want to eventually do with its budding mobile business.
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Illustration by Dan Frommer, photo by Cory O’Brien