Why Google has blown it with the Nexus One

After frenzied leaks and gushing speculation, we now know what the Google Nexus One smartphone really is: a refinement of the existing Google Android mobile devices. The frenzied fawning from the tech press was misplaced — the Nexus One is not a significant advancement in its own right.

Sure, it has some cool features such as speech recognition (for commanding apps and for dictation) and noise-canceling microphones. (However, I wonder about the network traffic that the dictation will generate, given that Google’s servers do the processing, not the smartphone.) The 3-D media organizer is also cool, and the new customizable home screen is a direct and welcome rip-off of the iPhone UI.

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But ultimately, so what? We can expect that kind of incremental enhancements from all the leading smartphone makers. (And why doesn’t the Nexus One support multitouch?!)

Baby steps toward smartphone freedom The potential game-changing attribute of the Nexus One is that Google is selling the device direct, without requiring a carrier contract. The laudable idea is that you should be able to buy the smartphone — and mobile OS — of your choice and use it on the carrier of your choice.

It appears that Google is trying via baby steps to move the industry past the exclusive carrier/phone tie-ins that have restricted the Apple iPhone to AT&T, the HTC Droid Eris to Verizon Wireless, and the Palm Pre to Sprint, and instead provide an option where the phone is not locked to a specific carrier.

But the Nexus One doesn’t really move that goal forward. The truth is even if you buy an “unlocked” Nexus One from Google and pay full price ($529), you can’t use it with any carrier. It works just with T-Mobile. Later this year Google will have separate versions for Verizon Wireless and — for the United Kingdom, Singapore, and Hong Kong — Vodafone. Other carriers would have to agree to let you use a Nexus One on their networks. It’s not clear that they will, especially in North America.

Google also missed a chance to overcome the technology barriers that prevent users from using phones on other networks, even when the carriers are willing. Instead of developing a trimode “world phone” that runs on CDMA networks and both types of GSM networks — something that already exists and thus needed no new development — Google is following the standard device-makers’ approach of building a separate unit for each carrier, which prevents device portability. (The Nexus One’s manufacturer and co-designer, HTC, says it is working on dual CDMA-GSM smartphones. Fingers crossed.)

Thus, a current Nexus One bought either with a T-Mobile contract or as an unlocked device will not work with the CDMA network that Verizon (and Sprint) uses, just the version of the GSM technology used by T-Mobile in the United States. Google says that the Nexus One smartphone to be sold with a Verizon contract later this year won’t likely support GSM networks, just CDMA. And if you wanted to use the T-Mobile-oriented Nexus One on AT&T’s network — assuming you can get a compatible SIM card — you’re restricted to the slow EDGE portion of AT&T’s 3G network. Though both carriers’ networks use GSM technology, T-Mobile’s 3G network runs on a different radio frequency than AT&T’s — and most GSM carriers’ — 3G network.

So why would you buy an unlocked Nexus One? It appears that when all is said and done, you’re just as locked to a carrier with a Nexus One as you are with any phone.

Why your smartphone is not free Outside the United States, the ability to use a phone on other carrier networks is easier, as the practice of buying a carrier-specific SIM card and moving it among phones is the norm — at least if the carrier uses the GSM technology, as most do. (A SIM card is a small, usually removable chip that contains the phone’s ID; it tells the GSM cellular network who you are and what carrier you’ve got service from. CDMA networks have no equivalent, and instead hard-wire this ID into the phones themselves.) But you need to get SIM cards with data plans for those other networks, and tp be truly portable your phone must support both the U.S. and non-U.S. GSM bandwidths. So presumably, people who buy a Vodafone version of the Nexus One will be able to swap in SIM cards from other GSM carriers, at least in Europe and Asia, where the technologies in use are largely harmonized.

In the United States, the fact that Verizon Wireless and Sprint use CDMA, and that AT&T uses one frequency band of GSM and T-Mobile another means each Nexus One model will not be portable across carriers. (Canadians will face similar technology divides.) Although multiband “world” phones can cross these technology divides, few are available, especially for smartphones.

These technical issues form one reason you see very few unlocked phones in use in the United States. But the bigger reason is that U.S. carriers form an oligarchy that thwarts real competition. Most other countries standardized on the GSM technology and regulators forced carriers to support both unlocked phones and phone portability — Europe led the way, because its citizens quickly experienced the pain of the carriers’ network lock-in attempts as they moved across an increasingly united Europe in the 1990s and 2000s.

But in the United States, it’s all about locking in the customer — and laissez-faire U.S. regulators have long supported such practices, perversely claiming that letting the carriers create walled gardens around customers was supporting competition and “the market.”

Google’s spokesmen danced around the portability issue in their Nexus One press briefing, just saying they hoped to increase customer choice over time. Perhaps through cajoling and implied threats, Google may be able to drive a wedge within the carrier oligarchy or entice enough users that they begin to demand that U.S. regulators require device portability and end the carrier lock-in practices. After all, the FCC has begun making noises about the lock-in issue, most recently in response to Verizon’s outrageous early-termination costs and its never-ending fees for smartphone users allegedly meant to recoup the subsidies for discounted smartphones. (My colleague Bill Snyder examines this misbehavior in his blog “Verizon’s big rip-off shows it’s as bad as AT&T.”)

And Google did get the FCC to reduce some of the carriers’ oligarchic practices in 2007 when it bid for wireless spectrum and successfully demanded that the FCC’s spectrum sales come with conditions that restricted some of the carriers’ more egregious lock-in practices.

But this kind of political fight takes years, and U.S. politics favor entrenched providers, whether they be telecommunications firms, insurers, or unions. Overpowering the telecom oligarchy is a long shot.

At first, I wanted to credit Google for making a tentative step in the direction of smartphone freedom. But that step is so tentative and ineffectual that frankly I think it’s a cynical fig leaf covering the usual practices. After all, Google is hardly the first company to offer the same model of device to multiple carriers; RIM, for example, has done so for years with some models of its BlackBerry line. And Nokia has long sold unlocked phones, even via the Web.

Google may believe that the “endorsement” of its Nexus One by three carriers is proof of positive change, and that its star power gives Google an ability to reshape the cellular industry (even if slowly) that not even Apple (which changed the music industry) has. But I believe Google’s Nexus One move will ultimately be ineffectual given all the forces at play. The truth is that offering unlocked Nexus Ones (and perhaps other phones later) on its Web site, along with discounted phones sold with a service contract from T-Mobile, Verizon, or Vodafone, is hardly different from buying a smartphone like the BlackBerry Bold at Amazon.com, Best Buy, Buy.com, or Carphone Warehouse and then choosing your preferred carrier for those devices that happen to be supported by more than one carrier.

The only way we’ll ever get the ability to choose a smartphone and carrier independently is for the platform providers that count — Apple, Google, and RIM — to first develop only multiband “world” smartphones and then refuse to sell their devices (or in Google’s case, use its Android license to forbid the sale of devices) to carriers that block or interfere with device portability. After all, it’s the device that buyers focus on first, so popular device makers have the leverage.

Google has made a lot of noise around the Nexus One. But it hasn’t really done anything important.

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This article, “Why Google has blown it with the Nexus One,” was originally published at InfoWorld.com. Follow the latest developments on mobile computing and Google Android at InfoWorld.com.