Google’s Nexus One: Getting the Fleet in Line with a Flagship

Google’s Nexus One was announced last week and got a lot of press, but I think much of the press coverage was missing the larger point. Google’s goal isn’t to sell tens of millions of Nexus Ones. It’s goal is to get the carriers and manufacturers in line so they can sell hundreds of millions of Android handsets that consumers can trust will be continuously upgraded. At the same time it tells developers the device that Google will be developing their latest releases of Android against.

iPhone as the Benchmark

Android’s main competition is the iPhone/iPod Touch. It is the clear market leader in micro-computing (the major step up from mere smart-phones). They have become the market leader with hardware and software and an ecosystem that  they control fanatically. Apple has created a unified and smooth experience that is consistant from its launch in June 2007 until now (January 2010). Apple also offers  predictable, reliable and valuable upgrades that keeps their user base happy, engaged and excited. They also have the incentive to upgrade legacy devices through revenue from the App Store carrier revenue sharing.

Apple’s iPhone/Touch community is as loyal/rabid a fan base as I have ever seen a brand have. There is little market research on the loyalties of pot heads and crack addicts, but if there were, many members of the iPhone crowd would be in the same ballpark of fanaticism.

Blackberry has it to an extent, and Google wants it, but has not had enough of a consistent offering to give the critical mass something to rally around.

Google’s Android Introduction

That is the space that Google is entered when they came out with their first Android phone, the branded G1/HTC Dream. They were heavily involved with the hardware on that product, and  had not released the SDK for Android at that point.

Thirteen months later, something happened that was both common in the mobile phone space and had to have bothered Android Product Managers.  Motorola introduced the Cliq with Motoblur. More on that in a bit.

Background on a Common Carrier/Handset Manufacturer Practice

HTC, Motorola, Sony Ericsson, Samsung, LG, Sayno, Blackberry and others make handsets that they sell to the major wireless carriers who then resell to their subscribers. The reason there are so many different flavors of Blackberry is because each carrier wants their device to be a little different and distinguished from the Blackberries on another carrier. If the exact same phone is sold by Sprint, Verizon, At&t and T-Mobile, then they can only differentiate on price, network performance and customer service. Keeping “better phones” as a differentiator is extremely valuable, and they wouldn’t know what to do without it.

T-Mobile got Blackberries with WiFi and WiFi calling. At&t got GPS and 3G first. Verizon was just happy not to be stuck with phones that were actually current when they released them. The carriers get to highlight their competitive advantages, regardless of how slight, but now Blackberry cannot get any traction behind their App World because developers can’t imagine developing for 1,500 flavors of 10 models.

Look as the value that At&t has gotten as the exclusive carrier of the iPhone in the US. It drives tremendous interest in At&t’s brand, even for people who don’t buy the iPhone. Apple hasn’t had to create different flavors for different carriers because At&t paid a huge premium for that exclusivity.

Google’s model for Android aspires to have the consistency of  the iPhone model, but when driven by 25 different companies expert in maximizing tiny little differences, Android risks being fragmented into oblivion, much like Blackberry risks now (but with millions addicted to the keyboards and contracted to the service).

Google’s Challenge with Carrier/Manufacturer Distinction aka the Motoblur conundrum

With Android, now manufacturers have the need desire to differentiate themselves.  Motorola doesn’t want to compete with HTC on just hardware. They enhanced/changed their Android offering to offer a distinct value to their device that was not available on other Android devices.

Motoblur is widget system that aggregates feeds from MySpace, Facebook and Twitter that puts them into the home screen user interface and prevents the need of logging into distinct apps, or an app at all.

Good idea? At launch, maybe. There are new cool things that made people talk about Motorola getting their act together with Android. But not long-term when considering the ramifications of being old, inflexible and obsolete (like Windows Mobile).

Open-source Android 1.5 was released to the world in April 2009. Android’s second public release was 1.6 in September.

In late October, Adroid 2.0 was released.

Motoblur was released on the Cliq in early November, 2009 running on Android 1.6. It was likely in development for 2-3 months with Android 1.5, then ported to 1.6 in weeks of frantic coding.

On launch day Cliq was now running Android 1.6 with some major customizations but running on a full version back of Android. Personally, I found the Cliq intriguing, but on the release day it was already on an obsolete operating system, and I wanted the latest operating system more than I wanted a pre-installed twitter/facebook/myspace aggregator.

Did Motorola hurry up and port Motoblur to their just released device? Nope. They were busy focusing on development efforts of the Droid and Eris. Also, they don’t have any motivation to upgrade old devices. After the sale, they don’t get ongoing revenue like the carriers or Apple or Blackberry.

Motorola’s Cliq is not the only example of a customized Android leaving a handset stuck on an outdated release, just one that I found particularly vivid in the Android/carrier/manufacturer challenge.

Nexus One as the Android Flagship

As the operating system owner, with no control over hardware, Google was left hoping that handset manufacturers wouldn’t continue to commit themselves to old, upgrade-resistant flavors of Android. The fact that Android is open source didn’t leave Google with much leverage in the matter.

So, they created their own branded phone that could be the flagship of Android. It would have Google’s behind it creating more legitimacy of Android. This was no longer a hobby for Google. They were visibly heavily invested.

The Nexus One got market leading specs for the hardware and every bell and whistle on it. It’s also safe to assume that Google will make sure that the Nexus One will get all the latest Android updates. This is Google’s reference handset to develop against. For app developers, it should be their reference handset too. The fact that it is available to consumers with the full force of the Google brand behind it legitimizes the scale of that investment.

The flagship flavor of Android doesn’t have any root level modifications, and is the most appealing phone out there. For carriers and manufactures, having a flagship model that runs the OS native makes any tweaks they could make to it hurt them more than it helps them.

So has Google gotten the troops in line behind Android unfettered? I think so. The Droid, with it’s $80M ad budget behind it is Android 2.0 unadorned.

Having all Android handsets support stock Android and easy upgrades is a differentiator that traditional phones cannot compare too. Does it level the playing field in a way that may diminish the beauty marks of carrier manufacturers and handset manufacturers? Yes. But it also shows what used to be perceived as market differentiators (beauty marks) are actually malignant moles that now grow hair, and without updates that trim that hair, they become less and less attractive over time (sorry Cliq with all your hairy moles).

With a unified front of carriers, manufacturers, open source developers and Google, there will be a competitive force that can compete with Apple. Without that unified force, Android is doomed to be something more akin to Symbian or Linux, where it is a viable product but there is no marketing muscle or unifying force behind it and it is reduced to niche markets that never hits the mainstream.

With the Nexus One, Google is shaping a model for an open-source commercially viable ecosystem.They are putting huge marketing muscle behind making the most attractive flavor vanilla, because it will always be kept fresh, and with their App world, can easily be flavored to taste by the end user.

If this works, the Nexus One doesn’t need to move many units, as long as it is the handset benchmark for the manufactures, carriers, developers and consumers. They just merged more of their ecosystem from Route 66 to the interstate. The only people pining for the good old days will be the marketing departments from the carriers and the manufacturers. The rest of the world will be much happier to move faster, smoother, less expensively and more efficiently.

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