Is Google’s phone strategy a good one?
§ Google is launching its own smart phone called Nexus One early in 2010
§ Sales distribution model #1: phone sold directly by Google to consumers, without the standard carrier subsidy that permits a $200 price point
§ Sales distribution model #2: phone sold with carrier subsidy
§ Potential advantages: tighter integration of Android O/S with hardware; more control over mobile search adverting business model; an opportunity to better showcase Google apps; greater influence over users’ mobile Web experience
§ Potential disadvantages: alienating Android licensees and partners (manufacturers, carriers)
Strategic Brilliance or Blunder: Brilliance. The tighter integration with hardware, coupled with Google’s open architecture platform and “simplicity” principle might lead to all of the advantages cited above.