26
April
2010
|
11:11 AM
America/Los_Angeles

Google Mobile Phone Strategy In Trouble - Verizon Drops Nexus

Google's strategy with its Nexus One mobile phone is in trouble as Verizon drops plans for support. Bloomberg's Amy Thomson reports:

Without a Verizon partnership, Google loses access to the carrier's more than 90 million customers, potentially blocking the phone from gaining more widespread popularity and hurting its competition with Apple Inc.'s iPhone. The breakdown of the deal signals Verizon may view Google as a competitor rather than a partner when it comes to Nexus One sales, said analyst Colin Gillis at BGC Partners LP in New York.

"It's really a flop for Google," said Gillis, who advises investors to hold Google shares and doesn't own any. "They paid a price to roll out their own branded phone -- it's a price of trust and relationship with some of the other players in the space."

Google's insistence on bringing out its own phone has been a pricey strategy in that it has alienated telcos and mobile phone makers. It also angered former ally Apple, which quickly moved to cut ties with Google, asking CEo Eric Schmidt to leave its board of directors.

Google could have maintained a fairly neutral position, licensing its hardware and software technologies to others, instead it chose to directly enter the mobile phone market, without any of the support infrastructure such as customer service.

This also shows that Google is at the mercy of the Telcos when it comes to what phones and services the Telcos choose to carry.

Will Google choose to become a Telco so it is able to introduce the phones and services it wants to rather than be at the mercy of what the Telcos choose to support?

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Please see: Analysis: GOOG Needs To Have Its Own Telco Service More Than It Needs A Phone...