Google Is Finally Changing The Mobile Industry

Google Is Finally Changing The Mobile Industry

Google’s Android operating system already enjoys a majority market share among smartphones, but with their Google Project Fi announcement, they are also finally making last changing to the mobile industry.

Android, as an open-source operating system, has been an industry success adopted by a large portion of the telecom industry.  While establishing itself as the rival to Apple’s iOS, Android has also not been as influential in changing the status quo.  Android is fragmented by various mobile carriers, who are able to install their own software and layers that sit on the true Android experience.  Their open system comes at a cost.

Google has long had it’s Nexus line of smartphones, which have the claim of being a true Android experience, making the product line seem to be following what Apple does for every phone they have ever made.

Google has struggled to reign in carriers.  The original Nexus line challenged the carrier-supported purchase model, with users buying a smartphone at full price and taking their phone to the carriers for activation.  In theory, this model held promise if the carriers were willing to stop subsidizing smartphones as a loss leader to make larger profits providing service.  That change never happened, and seems unlikely in the near future.

Google Fi does stand a chance.  Using the Nexus line, Google is offering network compatibility with the 3 platforms of mobility:  CDMA, GSM, and WIFI.  This fourth platform not only uses the previous 3, but it also offer seamless interconnection between them.  As a user, the phone can switch from Sprint’s network, to T-Mobile’s network, to their home WIFI network all during one phone call.  This is powerful technology that the industry will follow.

The other fundamental shift is how users pay and spend for service.  In the current model, users pay for cellular phone service, minutes, texts, and cellular data.  Google Fi has a chance to change the model.  Their service is priced in line with most of the Mobile Virtual Network Operators (MVNOs).  However, they key value is driven by the fact that the data the user doesn’t use will be credited back.  People who purchase huge family share plans but only use a portion of their data stand to gain serious money back every month, and could be potentially hundreds of dollars every year.

If this plan is successful, the mobile industry will gain a new source of competition, better prices for users, and more flexibility for users in how they use their data.

Compared to wireline service, the mobile industry is still in it’s infancy.  The landscape will change in the years and decades to come, and users finally have a chance to win in the marketplace.

2 thoughts on “Google Is Finally Changing The Mobile Industry

  1. Will

    Great article about the potential of this new service.

    But I have an issue with something you stated in your post.

    In theory, this model held promise if the carriers were willing to stop subsidizing smartphones as a loss leader to make larger profits providing service. That change never happened, and seems unlikely in the near future.

    All of the major carriers now offer plans that separate the cost of the phone from the cost of the service. T-Mobile was the first carrier to implement this and ATT and Verizon quickly followed suite. T-Mobile may get much of the credit for this but Google with their Nexus line of phones probably deserve some of the credit for making this happen in the first place.

    Reply
    1. tmschultze Post author

      Will, You offer a great point that most of the carrier do offer unbundled service plans. My assertion in the article is that there were other factors that led T-Mobile to make the offering, particularly their “Uncarrier” marketing strategy when they were the solidly 4th-largest US carrier. I don’t believe Google’s early Nexus program influenced any of the carriers to do so.

      Reply

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