Private labeling of devices helps to lift the control from device suppliers and sequestered applications environments. The objective is not to become a supplier but to lay out the core competitive pathway that the industry must follow.

Why must the industry follow Google’s lead?

Google itself follows upon the established and emerging trends of the industry – trends which have reached a cascade of factors that shifts focus to applications, content and Business-Social Networking.

The reason the industry must follow is to achieve competitive harnessing of technology and markets. Productivity and social adoption patterns preclude any attempts to stay on the sidelines. Productivity is enhanced by greater degrees of freedom to create, collaborate, and combine open sources. Google leverages their Android/Chrome OS apps environment upon which the framework for LBS, business-social networking, micro payments, and SaaS applications can and will flourish.

Where will Google go from here with privately labeled devices like the HTC Nexus One?

Google will try to establish brand recognition in the mobile device space. Google DROID branding is a more concrete way to fulfill that goal – Nexus One is unlikely to become a major juggernaut that would counter that goal.

Robert Syputa
Partner Maravedis

I do question some of your views on Google’s motives. Are they “anti SP” or are they “pro future”. Right now, carriers enjoy (and abuse) some power in the market place. Thus they can (and do) extract more money from their customer than they should. Thus they are inefficient and pass this cost to their customers. This could be another complete blog.

If we step away from the particulars of Google, the Mobile Carriers (or other SPs), and look at the rest of the computer and internet industry, we see countless examples where vendors and service providers provide rapid improvements in price/performance, service, features, etc. Try to imagine SMS style charges for Internet users or for SF subscriptions.

Google understands that value will migrate to smart phones and cloud-based services (with or without Google) Google wants a bright shiny device to show-case this vision here and now. That is their motivation.

That said, Google has flubbed the Nexus launch. They are too stuck in their future vision to realize that customers need an end-to-end solution now. Apple understood that and that is why they partnered with AT&T. Sure AT&T got a lot, and provides a decidedly NON-Apple customer experience. But it still succeeded big time for Apple. Google is starting late and not quite running in the right direction.

I agree with your views (and those of Khalid) on why Google launched the Nexus One. However, Google will need to improve/re-think its customer services strategy for selling handsets. There have been several negative reports in the press where customers have been complaining of insufficient customer support. Google has been only able to respond to customer queries via email, and has said email response will take up to two days!

Perhaps Google needs to re-examine the value provided by MNOs in terms of the customer service they provide.

Jeanette

I agree with your key points about the Google’s phone. I want to focus my comment in the key point, and I think that the main reason for Google to sell its own mobil device is to mantain its control over the mobil-advertising as they do with the online-advertising.

Internet on the mobil-phone has grown a lot in the last 3-4 years, and nowadays it is common between owners of a 3G mobil phones to access to Internet with a data-traffic plan as they do with DSL in their PCs.

So with this growth of internet accesses on the mobil phones, Google wants to secure his position as king of the online search in the mobil market, and the best option to achieve this is to introduce Android and Nexus One as much as they can.
More users with Android / Nexus One means more users with Google’s apps by default in their devices. While users can continue to use Google’s software (Google searcher, Google maps, Google Docs, Gmail and so on) in their mobil phone, Google can keep controling the advertising market on the mobil phones.

I just wanted to point out this, but as you have explained in your article, there are more reasons behind the appearance of Nexus One on the mobil market, but you have already explained those other reasons very well.

And yes, I also think that some enemies will appear to google soon…

1. No one wants to carry a 2 – 3 Kg laptop and a mobile. All we are looking for is a one device. That is absolutely what change Google is driving towards.

2. Forget the competitors, as Google has always been a trend setter or first mover, its time for other companies to think and innovate. Do we all remember the story of Sony Walkman? What happen when MP3 players hit the market. Now having a Walkman is an antique piece. Similarly Nokia’s and other manufacturing handsets will be.

3. When you have the strength to leverage both on the Hardware and Software why not. IBM is a great example of failure when they sold DOS to Microsoft. And i think Google will not make a similar screw-ups of last century of what IBM did. The big blue is no leader in any of these segments.

4. Everyone is now search driven. Be it at homes or work or school. Another strength.

5. For a long time Google has been more of a Virtual provider to the user either online or with some apps. on mobile phones. It is time to get physical with the end-users and drive the world of computing.

Rgds

But on one side Google is targetting the mass market and on another side they are launching smart phones ( which no doubt will be costly ) . Of course unlike iPhone Apps, the applications for Nexus one will be usually free, the Nexus one is still far behind iPhone which has already 90,000+ apps available !!!

Apple sent a huge wake-up to the mobile industry with the iThingy. I don’t think this is a ground breaker for Google but it is definitely a lever to open up the market. I’ve not used the phone but it looks/sounds good, and I’m sure Nexus 2 will polish off the rough edges.

Google do great stuff, with Search and Chrome and Maps and Earth and more importantly open APIs. Bringing that approach to mobile will be refreshing and the Google community I’m sure will embrace that and start to develop the apps and joined up apps and cloud apps that will rock the market. No they don’t need an own brand (or badged to be more precise) phone to do that, but a positive statement it is and one that will help to build that momentum.

This could also an be interesting piece in the Wave jigsaw.

The benefit to Google of having this hardware, is that to make it really useful, your email has to be Gmail so that it can sync the email, calendar, and contacts automatically. Even though I’ve use Yahoo for many years, as soon as I got the phone, I switched from Yahoo email to Google email, thus I never visit the Yahoo site anymore; Yahoo is just forwards my email to my Gmail account. Now I only use Google on my laptop, the Chrome browser is great, and I just see Google ads. Yahoo is out of the picture. Sounds like a good approach on Google’s behalf, something physical they can sell.