Well that was a day to remember. The day Google got stuck into mobile merchandising and nailed the mobile operator to the wall.
That’s it: thank you for coming, mobile operators! You did your best. But now you’ve been ‘owned’.
Well, maybe not yet. But do look out for the big G. With the Nexus One, Google has ushered in an entirely new way of buying a consumer handset: from its website in six clicks. Shit! Is it that simple?
Yes, it is.
If you’d like a Nexus One, they’re shipping right now. You buy it from Google. Not from your operator. Here’s how it works. You visit Google.com/phone and select your financing option. You either buy your phone outright, or you get it financed by a bank/mobile operator that also supplies your voice and data connection.
The whole proposition makes the operator an also-ran. It’s been relegated to bit-part status in the new Google process. Choosing your network is now like choosing whether you want to pay with MasterCard or Visa. It doesn’t make much difference. Yes, we’ve had billions of marketing dollars spent making sure we ‘care’ what operator we select. But, the reality is there isn’t much difference between them.
Who do you buy your electricity from? Do you care? Exactly.
For all my excitement, I realise that it’ll be a little while before consumers begin relying upon Google for their telecommunications needs. You can see it happening though. You can see the strategy. Soon you’ll be able to buy all manner of handsets through this channel in a slick six-step interface powered by your Google Checkout account.
If you, as an operator, are not on the Google.com/phone page, then you’ve got a major problem, because 100 per cent of people buying through this mechanism will never, ever choose you.
In one stroke, Google has converted the mobile operator into a bit pipe, into an incidental ’supplier’. At present, it’s only offering one handset and demand will be limited to die hard geeks. But what happens when Google adds five more ultra desirable phones? Or 50?
How will the operators react when the manufacturers, freed from the constraints of having to serve their operator overlords (no wifi in that phone’, ‘switch off VOIP‘), start to respond to market demand quickly. Freed from these restrictions, imagine how they’ll react to a Google portal that’s retailing 50,000 devices a week to a rabid audience of consumers finally getting the devices and services they want?
There are pitfalls of course. Your average operator is pretty good at dealing with fulfilment. If I phone 3UK at 11am on Monday and arrange for a new handset, chances are it’ll be at my door by 9am on Tuesday. How well will Google handle returns? Can I phone Google and complain about lack of T-Mobile signal? Where does my relationship lie with the transaction?
Google will have to figure this out. But ultimately, the overriding issue is that it doesn’t give a stuff about the operator. The networks are in the way. Google’s focus is advertising revenue. Yes, it might make a small margin on unit sales, but making sure people get access to Google services and get online is its top priority.
When you start counting the billions of dollars of mobile ad revenue to be had over the next decade, you can see why Google wants to promote smartphones and wade into the existing marketplace unhampered by the operators.
Clearly, Android is the means to get mobile users online. Research says people search the web 30 times more on an Android phone than they do on a feature phone. So feature phones don’t help the Google project at all. In fact, browsing search results featuring Google Ads on these devices is next to useless.
This is the start of the new era. Making Google the search engine of choice on the operator portal was useful. But here is the real strategy. If anything reflects Google’s belief in the potential of mobile, it’s this.
Fascinating times.
Ewan McLeod is the founder of Mobile Industry Review, a mobile market watching website (www.mobileindustryreview.com)
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