Google to mobile industry: 'F*** you very much'

http://www.theregister.co.uk/2010/01/08/google_nexus_partner_friendly/

by benpbenp • 17 years ago

70 94 17 years ago

theregister.co.uk

So, I'm kind of torn here. We're watching Google ascend to a position where they can bend numerous markets to their whim, but they aren't really cheating the consumers at all. If anything, they've been great to us. Beyond that, as a college kid with an interest in distributed systems/networks, I should probably be angling to try to work there someday. But still, I'm scared, because it's hard to trust a company that big to do no evil.

Am I just being paranoid? (Not a rhetorical question)

ytinas9• 17 years ago

No, not at all. Worse, Google is a public company, toiling under the requirement (by law no less) to ever increase share holder value. If Google found itself as the main (or sole) player in the cell market there would be a very obvious way to dramatically increase share holder value. And if they play the game properly they will also use this time of dominance to set up so many blocks to market entry that no one will be able to easily do anything about it.

rms3• 17 years ago

I don't think that's true. Google's multi-class stock system makes them less subject to the immediate whims of the shareholders. Google's main strategy now is to make the internet better. Anything that improves the internet makes them more money. Cell phones are the internet. So if Google improves the cell phone marketplace, they make more money. Google taking advantage of a cell phone monopoly is unlikely if it takes away value from consumers.

jambalaya• 17 years ago

Until the next Google?

lawn• 17 years ago

A pretty good point against Google is their user support which isn't that good. I've never been in contact with them personally but I've read a fair amount of complaints. Especially with adwords it's hard to get a fair response from Google.

gaius4• 17 years ago

they aren't really cheating the consumers at all. If anything, they've been great to us

The thing is this: the relationship that exists between me and T-mobile is, I pay them money and they provide me with voice and data and BlackBerry services. Now I'm obviously just one individual, but I am fairly representative of a high-value subset of T-mobile's customer base and as a collective, T-mobile's interests are well aligned with our own. They aren't going to screw me because in doing so they'd screw us (e.g. all BB owners) and we'd migrate en-masse to Vodafone.

The relationship that exists between me and Google is that they provide me with free services so long as I and those like me engage in behaviors that are beneficial to their advertisers. It's difficult as an end user to get support from Google because they don't really care; they'd care only if their quality of customer service could affect my purchasing decisions with their advertisers. If people who couldn't get tech support from Google for their phones switched to Bing for search maybe they'd care, but I doubt anyone does that...

btilly4• 17 years ago

Not exactly. The relationship you have with T-mobile is that they have signed you to a contract that locks you in to their service. At every turn T-mobile's goal is to lock you in, and once you're locked in they don't care about you.

By contrast Google sets things up so that you can switch at any time, and they constantly have to keep you happy.

kl4m2• 17 years ago

How is it really different? If Google don't get you to use and keep using their service, they lose you as a product to sell to their advertising clientele. Users are still indirectly their revenue source.

fauigerzigerk• 17 years ago

Tech support is one thing but the more problematic thing is that they have an incentive to spy on us to increase value for their actual customers, the advertisers.

But I'm torn, because google also has an incentive to make content available for free, which also makes it available anonymously.

RyanMcGreal2• 17 years ago

I can never tell how much of a given Register article is prescient contrarianism and how much is straight trolling.

j_b_f• 17 years ago

Yeah, it's a little over the top. I don't like how articles like this always fail to put forward the theory that maybe Google did the N1 to avoid Windows Mobile's fate by creating an in-production reference platform that commits them to backwards compatibility. It probably won't prevent further fragmentation, but it's worth a shot.

Also, it's not Google's fault that the other Android devices suck ass.

drats• 17 years ago

Orlowski's articles are often blatant trolls, this one is way out there claiming that the mobile operators who've had us over barrels for so long should be felt sorry for because they can't break the net. Nobody is stopping them making a video on demand service, people are stopping them from making a video on demand that has priority and blocks others. And calling all the civil society groups that fought for net neutrality Google sockpuppets is a bit much.

He's siding with all the other players to be a troll but we side with Google not because we love them but because we don't want the carriers to be anything more than ISPs. They are simply too stupid to manage it, look at SMS data transfer still costing four times more than data transfer to the Hubble telescope. Whereas you have Google pushing open jabber chat protocols and then building Wave on top of them. Who do you trust, a bunch of dying lock-in mongers with a track record of squeezing everything they can out of you and the troll-jester Orlowski or Google which has a decent track record open sourcing most of their stuff and adding value?

As someone who has suffered iPhone lock-in and incredibly poor customer service (3G on my 3G iphone has never worked from day one and the carrier and Apple refused to do anything about it - even suggesting I "turn off 3G to abate the problem" WTF) I can't wait for unlocked no-contract Linux phones to become the norm and just wipe them all out. And I don't think Google cares about "the mobile industry" either, they can burn bridges there because that industry doesn't work as a block (there is no honour among thieves) and they can always find one to make the hardware for them.

RyanMcGreal2• 17 years ago

> we side with Google not because we love them but because we don't want the carriers to be anything more than ISPs. They are simply too stupid to manage it...

Amen! For now, I trust Google because they've positioned themselves in such a way that they benefit from doing the right thing. The balance of incentives favours openness, because Google is in the best position to exploit open platforms to deliver their services. The rest of us benefit more or less incidentally.

ytinas9• 17 years ago

I don't trust Google myself, but you bring up very good points.

dunk010• 17 years ago

Yes, exactly.

seldo3• 17 years ago

In addition to being a troll, Mr. Orlowski has a long-standing and irrational dislike of Google in particular, and while this is the most credible piece I've ever seen from him, everything he says about the company should be taken with huge heaping spoonfuls of salt.

In his typical M.O., he takes an initially rational argument (Google is competing with mobile operators it was previously partnering with, which is going to accelerate their transformation into dumb pipes) and then extrapolates to ridiculous conclusions (Google is secretly attempting to build its own private Internet and become the only ISP in the world).

Google is definitely a threat to mobile operators, but then the writing has been on the wall for their business model for a long time -- a disruptively cheap VoIP operator with a data-only handset is going to be the end of the archaic concept of "voice minutes" and thus their profits. It might be Google, or it might not, but it's going to be somebody.

Locke1689• 17 years ago

Nothing says intelligent debate like righteous indignation :/ (referring to the register, not you)

SwellJoe4• 17 years ago

Since we've all been screwed by the mobile industry for the entirety of its existence, I'm not sure how I'm supposed to feel indignant towards Google for pissing off said industry. There are very few industries more arrogant and abusive than the telcos (at least in the US; I dunno about the UK), and if Google wants to take their place, I'm all for it. Instead of playing the consumer-screwing game better (like Apple did with the iPhone and its subsidized/locked-in model) Google is leaving those decisions up to the consumer and giving them a fair deal all around.

My impression is that Google looked at the existing phones and the way they were being sold (exclusive to specific carriers, and used to lock consumers in, just like all prior phones) and felt that it just wasn't doing the job the way they'd planned. Android had a reason for existing, and it was to break the logjam in the mobile industry so that Google could get on with the business of monetizing the hell out of mobile users. Since the old players decided to use Android to play by the old rules, Google simply reminded them of the way "open" is supposed to work. The play here is not for Google to become a traditional mobile device provider or to become a mobile service provider (though they'll touch on both). The play is to make the mobile web standard enough and good enough and pervasive enough to where Google can work their money-making magic there. Telcos are standing (aggressively) in the way of that, and the device makers remain willing partners in those plans.

ubernostrum2• 17 years ago

So your argument, in a nutshell, is "two wrongs do indeed make a right"?

btilly4• 17 years ago

I fail to see the second wrong.

What did Google do? They built their own unlocked phone following the open reference platform that they helped create. And now they are trying to sell that phone on the open market.

How is this wrong?

CalmQuiet• 17 years ago

More like: Upgrading to two wrongs may - in this case - make a right (for consumers).

SwellJoe4• 17 years ago

No, my argument is that Google has done nothing wrong. They provided an Open Source OS that any phone maker could use (like Nokia/Symbian has done before), and when that failed to light a fire under the device makers and get them to do the right thing by their customers, Google stepped up and did the right thing by their customers (who overlap with the phone makers and telcos, but Google monetizes them differently...and historically treats them differently, as well).

I see a turf war between carriers (with Apple thrown in as a spoiler on one side) where the casualties are mostly innocent bystanders (us consumers). Google is sort of acting as a UN peacekeeping force, here. They might do some harm, as well, but their overall intent seems to be to knock some sense into the warring factions and make them stop treating consumers so badly. As with the UN, they are mostly powerless to fix the underlying issues, but they can at least set a good example of how to engage. I fear I might stretch the analogy a bit far if I go into any further depth or start mentioning war crimes, so I'll stop now.

But, I definitely do not see anything wrong with Google partnering closely with a handset maker (HTC) and producing a great phone with fair and open pricing and usable on most networks. I'm not sure what you believe is wrong with that...if there were some sort of contract or agreement in place to prevent Google from doing this, I'm sure the lawsuits would have already been announced. I'm, frankly, happy that Google has opted not to collude with telcos to keep the status quo (the way, say, Apple has done).

bbuffone2• 17 years ago

Everyone complains about the mobile industry but if I listed the industries that have or are currently screwing me mobile isn't even in the top 10.

Health-care, Insurance, Oil, Headphones, Government, Credit cards, Banking, Financial, Video Games, Cable then maybe mobile.

My mobile plan is one of the lowest monthly bills that I have based on amount of usage. To my knowledge it is one of the least subsidized industries. Are there issues? Sure. Could coverage be better? Sure. Would it be nice to have true consumption $/Mb pricing? Sure. Are they too locked down, Definitely, but the iPhone showed them what unlocking the phones to 3rd party developers can do.

I am not sure what another unlocked phone is going to do. The life-cycle of phones is shorter than the term of a mobile contract. So it really doesn't help me. If the phone allowed me auto-switch between AT&T and Verizon based on the best coverage and I paid Google on a $/Mb. That would be a game changer and push the mobile industry farther.

sokoloff• 17 years ago

The Headphones industry is screwing you?

And specifically screwing you worse than the others you list later? I'm very curious to hear more about this...

chrischen3• 17 years ago

I find it interesting when people trash the government. In the US atleast, you have some control over it. If you are getting screwed by the government, you have various outlets to mobilize change and if you don't act on them it's no ones fault but your, since the government answers to it's shareholders: you.

ax0n3• 17 years ago

Care to tell me why you listed banking, creditr cards and financial? Also, I think I can speak for most of us in saying that the communications industry as a whole is pretty much one big cartel. Cable, landline, long-distance, voip, mobile, ISPs... the lines are getting blurred more and more by the day, and none of them have our best interests in mind. Bandwidth caps on mobile data plans, ISPs and net neutrality all hearken back to the days of anti-competitive practices with phone billing. The more things change, the more they stay the same.

Health care, Big Pharm and insurance are indifferentiable, as well. It's all one big cash party with price fixing, tax write-offs, and lots of customer-screwing to go around. Government is getting tied up in there as well.

Sucks about your headphones. That's why I never spend more than $60 or so on a pair.

SwellJoe4• 17 years ago

Screwing me is unacceptable, regardless of the relative degree. The mobile and telco industry is extremely consumer-hostile, and anyone that argues it isn't simply isn't paying attention (or is a shill for the industry). Google has never screwed me or tried to screw me. Maybe they will, someday, and maybe they have screwed others. But, in general, Google has done the right thing by me, and I believe the Nexus One is also an honest attempt to do right by me, as a mobile device consumer.

skywalker3• 17 years ago

"...Google looked... the way they were being sold (exclusive to specific carriers, and used to lock consumers in, just like all prior phones) and felt that it just wasn't doing the job the way they'd planned. Android had a reason for existing, and it was to break the logjam in the mobile industry".

If that was their intention, they failed at it. The Nexus One costs about the same as the iPhone to produce, yet the unlocked version is sold by the the same price that what an unlocked iPhone would be. That means their are getting Apple like obscene margins.

No non-technical user in his sane mind would pay $330 more for an unlocked phone.

What they must do, if it is not obvious enough, is to get Amazon like margins and monetize the rest with a wave of new consumers hungry to look at ads.

orangecat• 17 years ago

The Nexus One costs about the same as the iPhone to produce, yet the unlocked version is sold by the the same price that what an unlocked iPhone would be.

You can't buy an unlocked iPhone from Apple in the US. You can buy a contract-free iPhone for $600, which is more than the Nexus One and still locked to AT&T. Yes you may be able to unlock the iPhone yourself, but that gets you in a constant cat-and-mouse game with Apple who considers you a criminal at that point.

No non-technical user in his sane mind would pay $330 more for an unlocked phone.

T-Mobile's plans are $20/month cheaper if you're not paying off a subsidized phone, so you'll more than recoup the cost difference of the unsubsidized N1 over two years.

SwellJoe4• 17 years ago

The Nexus One costs about the same as the iPhone to produce, yet the unlocked version is sold by the the same price that what an unlocked iPhone would be. That means their are getting Apple like obscene margins.

The point: You missed it.

The Nexus One is officially unlocked, and usable on just about any carrier. The carriers are the problem here, and breaking the hold they have over consumers in order to allow competition on price and quality is the goal. The Nexus One isn't magic. It doesn't fix the carriers; but it is one more thing to allow consumers to escape without having to break the EULA, hack their phone, possibly bricking it, etc. Apple is the enemy of this idea, not a friend, and the iPhone is among the best servants the old guard (well, the oldest guard, AT&T, anyway) has in their fight to maintain a stranglehold over consumers communications.

joe_the_user2• 17 years ago

The article is kind-of trolling against Google really.

The idea that Googlenet means Google isn't respecting net neutrality is a sham. Other operators could create something like Googlenet for some internal purpose. They just extract rent from the public switching networking their operating.

Sure, Google is very much about making money, it's just it makes money providing value-added-services (search+advertising) rather than extracting rent on anything that travels through it's pipes.

It has the means to be the one who provides these value-add-services and it intends to keep those means. But the way it does this is increasing the quality and quantity of products - a good thing for us.

A story where Google is preventing someone else from providing more would get my attention.

sethg• 17 years ago

Awww. Do the poor wittle cellphone manufacturers have their poor wittle feelings hurt? Here, have a blankie.

Really, I’m having trouble seeing what the complaint is behind all the bombast. The author doesn’t claim that Google is selling the phones at a loss or doing anything else that would raise an antitrust issue. Carriers can offer the Nexus alongside other manufacturers’ Android phones and, for that matter, the ten thousand other cellphone models that clog the market. Most consumers will choose among those models based on prices and features, not brand name. (Microsoft sells keyboards and mice under its own brand name, but they’ve hardly put the other keyboard and mouse manufacturers out of business.)

So where’s the problem? That competition might reduce the profit margins of cellphone manufacturers? From my side of the salesman’s counter, that’s anything but a problem.

nihilocrat• 17 years ago

My first thoughts as well. It's about time someone with actual clout gave the mobile phone cartel the shaft. Yes, it's a cartel, when you pay $.50 a text message off your plan with all carriers there's gotta be some price fixing behind the scenes.

dfragnito• 17 years ago

Not sure having one mobile provider will result in a reduction of price. It's free now but you will pay later.

gaius4• 17 years ago

Yes but who really does that? Except when roaming. Even a basic plan will have like a thousand texts a month.

eli• 17 years ago

The degree to which Google is "shaking up" the mobile industry has been vastly overstated by the media. I think this is mostly due to the crazy rumors that were flying before the launch (e.g. it was going to use SIP for calls, or that it would be massively subsidized/free even without a plan).

What Google actually offered with the N1 is not very revolutionary. Selling unlocked phones online isn't new. Nor is having phones that run on your choice of US carriers (hello, Blackberry).

Really, the only innovation here is at T-Mobile, which has calling plans that are a little bit cheaper each month if you bring your own phone instead of having them subsidize one.

dhyasama• 17 years ago

Does anyone really believe the companies that were supposedly shafted were surprised when Google released their own phone? I knew the Google phone was in the works long before any of the other phones came out and I don't have connections at Google or telcos. I'd bet money the device manufacturers and the the telcos were well aware of the Google phone when they agreed to work with Android.

coffeemug• 17 years ago

How much the consumers have gotten screwed on the phones is peanuts compared to how much the consumers have gotten screwed on voice charges. Really, there is no such thing as circuit switched networks anymore, so there is no technical reason to charge people by the minute. Google, get Skype/Google Talk/whatever on there, let us buy flat fee data plans, and put the bastards out of business already.

kgosser• 17 years ago

What a ridiculous article with antagonistic points. Terrible writing too.

bradgessler• 17 years ago

It would be interesting to see a decent unsubsidized $100 Android device hit the market. This would be inexpensive enough where a consumer could buy the phone outright and choose a telco without a long-term contract.

shareme• 17 years ago

You have to take this article with a large grain of salt as Google's obvious target was not non-US mobile telecoms but US telecoms

And obviously caught in the middle is OEMs who attempted to do Mobile Telecoms bidding..

The other obvious target is China Mobile to derail their Ophone initiative

scotty79• 17 years ago

Other Android phones are to Nexus One as Firefox is to Chrome.

If Google does the same thing as you do it doesn't mean it doesn't love you anymore. It still will cooperate with you and it still will pay you. It just wants to try out some things but they don't want to force you to try it for them.

Zak• 17 years ago

The mobile providers are being pushed in to being dumb pipes essentially like ISPs and I'm supposed to feel sorry for them? How is this anything but good for consumers, and fair for the mobile industry?

txxxxd• 17 years ago

This guy doesn't understand the industry he's writing about.

Telcos benefit by not having the overhead of advertising and supporting phones. They make their money selling services not phones (hence the heavy subsidies.)

Manufacturers benefit by the popularity of the Android platform. It's easy to get people to switch to your hardware if they already know how the OS works and can use all their existing apps.

seldo3• 17 years ago

Well, there's two side to that. The fragmentation of the mobile industry is the problem that Android was built to solve. However, Google getting directly into the business of making and selling handsets means the playing field is no longer level. That was the author's point, at least before he went off the rails and started off-handedly claiming that global warming is a hoax.

jsz0• 17 years ago

I wouldn't even consider a third Google Android handset in the future. HTC (and others) are burning too many bridges not getting updates out the door fast enough. I can't even run most of Google's new Android first party apps on my phone because I'm stuck with Android 1.5 and Sprint/HTC won't commit to any time table on an update. "2010" is as specific as they want to get. Android 3.x may be out before I even get 2.x. Good work guys. Great end user experience. Maybe Google did some shady stuff here but the third party handset makers screwed themselves too.

gamble• 17 years ago

I suspect that the motivation for an official 'Google Phone' is to provide at least one model that's guaranteed to get firmware updates in a timely fashion. With luck, it will pressure the other handset manufacturers to provide the same service.

msbhvn• 17 years ago

So Apple gets attacked for not allowing their OS to run on non-Apple hw and Google gets attacked for allowing their OS to run on non-Google hardware? (I realize they're actually being criticized for now having their own device here, but just another perspective). I guess you could just not have your own hardware, since that's working so well for WinMo.

pkulak• 17 years ago

All another company needs to do is build a better phone and they'll have all the press again. Without Google's (free, by the way) OS, Motorola would be just about dead by now. And I don't think Sony Ericson or LG had some great mobile OS in the works either. Google may have single-handedly saved a half dozen companies from being eaten alive by Apple later this year when the AT&T exclusivity runs out and all we every hear is how Google is screwing over it's partners by having the gall to have an HTC phone Google branded and sold online.

Google to mobile industry: 'F*** you very much'

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