Google wins, Motorola loses

The papers, the news, blogosphere etc. are all abuzz about the new Google Nexus One.

The “phone” is actually two different phones: an unlocked GSM phone for T-Mobile and an unlocked CDMA phone for Verizon due by June. Since the GSM phone will also work on overseas networks (but not AT&T’s 3G network), it’s not clear whether this phone is the one planned for Vodafone, or it will be yet a third phone.

The new phone doesn’t appear to be much different than any HTC Android phone, except that it has Android 2.1 and a 1 GHz processor from Qualcomm. (The first Android phone was also Qualcomm Inside).

The reviews have ranged from fawning to skeptical, but overall the phone appears to be an incremental improvement over existing phones. The business model — $530 unlocked or $180 with a T-Mobile subsidized contract — appears to be somewhat different, but unlocked phones have been available for years from Amazon or even my local Fry’s. (The former is how I bought my Nokia E65).

So why is Google doing this? The new OS and faster processors will be used by other vendors later this year. The unlocked model is certainly one that can be used by others. Does Google so want to get its brand out there that it has to have its own branded phone? (Having the Google logo on the back of most Android phones isn’t enough?)

One possibility is that this was an engineering (or ISV-oriented) prototype, developed for internal use, that someone decided to commercialize. Although I don’t know if it ever shipped, several years ago I heard that Nokia was working on an unlocked, reflashable handset for exactly this reason.

What is certainly happening is that Google is competing with its OS customers. I am not the only one who thinks this is a bad idea. (Android is nominally open source, but in terms of actual openness it is really provided a Google-led industrial consortium).

Who are its customers? Phandroid — a once-authoritative Android phone site — lists 15 other Android models currently available, although some of those are variants in different national markets. Three are from Samsung, two are from Motorola, one from Huawei and the remaining nine from HTC. Two are CDMA — the Motorola Droid and the HTC Hero), one is dual mode (Samsung Moment), and the remainder GSM.

Huawei has no choice, and HTC seems happy to let others rebrand its products, but what about Motorola and Samsung? (The Open Handset Alliance also includes LG and Sony Ericsson, leaving Nokia as the only top 5 handset maker not participating).

Is this a careful calculation that the major handset makers have no choice but participate? With Windows Mobile continuing its long slide, Motorola seems to have all its smartphone eggs in the Android basket. Samsung sells lots of Windows Mobile phones (BlackJack, BlackJack II, Jack) and has dabbled in Symbian and LiMo as well, but seems perfectly happy to sell its proprietary OS.

So the Chinese and Taiwanese makers will just grin and bear it, the Koreans will go on being platform agnostic (if not platform indifferent), and this gives Nokia even more reason not to join the OHA. (Not that was ever likely).

Which leaves Motorola as the one in the pickle. What should Sanjay Jha do about Android? His company already had limited brand visibility on Verizon, which is using “Droid” as its own subbrand for all Android phones from its various suppliers. Now it’s having to compete with its OS supplier.

The Japanese have an expression: “sho ga nai.” Roughly translated, it means: “ain’t nothing you can do about it.” While at Qualcomm, I’m sure Jha spent enough time selling Qualcomm chips in Japan to learn this expression, but that doesn’t make his problem any more tractable.