Google/Verizon Announcement Changes Everything

With its amazing combination of features and vast array of low cost applications, the iPhone has been a game changer – it’s been hugely profitable for Apple and has helped AT&T substantially expand its subscriber base. But due to an exclusivity agreement between the two companies, AT&T has been the only game in town for iPhone users. With a relatively quiet announcement from Google yesterday, the playing field for smart phones has shifted dramatically.

In 2008 google announced an open software platform, called Android, for use in smart phones like the iPhone. Android competes with Apple’s iPhone software because it provides an operating system or software core for smart, location aware touch screen mobile applications. But Google’s strategy also differs from Apple’s in some important ways:

  • The iPhone software is “open” in the sense that developers are encouraged to create their own applications, but Android is more open in the sense that the platform itself is available for inspection and modification.
  • Whereas the iPhone software is tied to a particular piece of hardware (the iPhone :), Android is hardware independent and is therefore portable to any mobile device.
  • The Android platform is available to all phone manufacturers and all service providers.

Thus, it’s easy to imagine a new generation of smart phones, provided by multiple service providers, all built on Android and competing purely on the basis of price, services, and applications.

At the end of 2008, I took a close look at Android but at the time there was only one phone available (the G-1) and it was available from only one carrier (T-Mobile). Yesterday’s announcement changes all that – the largest US carrier, Verizon Wireless, announced plans to deliver two new Android phones by the end of this year. Sprint has also announced a new Android phone to be available October 11 and T-Mobile has had one for over a year.

That makes three of the four major US carriers (basically everyone but AT&T) that have now committed to making Android phones available on their networks. Verizon also one-upped Apple/AT&T by announcing willingness to support Google voice, which would allow users to make free calls via the internet, bypassing their cellular voice network:

Verizon signaled its commitment to opening up its network by pledging to support Google Voice, a program that allows users to route their calls to one Google number and also receive advanced phone features all for free. AT&T and Apple set off a government inquiry earlier this summer when the same app was rejected from the iPhone App Store.

Don’t get me wrong – the iPhone is a once in a lifetime, killer product and it’s not going away any time soon. The main problem with the iPhone is not technical – it’s political in that it limits competition and flexibility. No one but Apple can see or modify the core software. No one but Apple can sell devices that run the iPhone software. And no one but AT&T can provide the voice and data services for the iPhone. The promise of Android is to knock down those barriers so that people can use the best software on any hardware with any carrier – isn’t that how it should be?

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