Executives from two of the carriers have said that they have spoken to Google about the phone but refuse to elaborate on any of their discussions.
However, one Telstra executive said that there are concerns that Google may subsidise the phone, with consumers being offered the new model smartphone at prices significantly lower than offerings from Apple, HTC and Research in Motion. One price being speculated is $199.
The difference will be made up by display, location and text advertising delivered to the new phone by Google.
A senior Telstra executive said, “It is a powerful organisation that has content and the ability to sell a variety of different types of advertising, including display and location, as well as its traditional text advertising. If consumers take to the phone and application developers and content providers support the Android platform because of the revenue returns, it could be a serious threat.”
He added, “While a carrier gets data traffic from the use of a SIM card, Google is tipped to be pushing a Skype-type service or a Talk service that will allow users near a wireless network to get free calls and a video service. This could hurt carriers. One option for carriers in some countries is to lock the Google phone out of a network when the Sim card is activated. This is fairly easy to do for a carrier,” said the executive, who has worked for Telstra for many years and does not want to be identified.
SmartHouse has been told that the phone will be sold online directly by Google and that it will be an ‘unlocked’ phone that won’t be tied to any specific carrier in Australia.
Earlier this week the US Federal Communications Commission confirmed that a “Google phone”, HTC’s Nexus One, was approved with the model number PB99100 being issued in the USA.
What is not known is whether a version of the phone has been submitted to Australian Authorities for approval.
The US filings confirmed technical details, such as microSD expansion, 802.11b/g Wi-Fi and Bluetooth 2.1 + EDR. It also has support for quad-band GSM/GPRS/EDGE with UMTS/HSUPA on 850/1700/1900 frequencies.
Google is confident that the new phone, which is tipped to have a large OLED display screen, will spur developers to deliver applications for the Google Android platform. Last week the company confirmed that several employees had been given a sample of the new phone to experiment with the new design and applications.
Google said in a statement, “At Google, we are constantly experimenting with new products and technologies and often ask employees to test these product for quick feedback and suggestions for improvement.
“We recently came up with the concept of a mobile lab, which is a device that combines innovative hardware from a partner with software that runs on Android to experiment with new mobile features and capabilities.”
Google believes that it can deliver video advertising to the phone from its YouTube service with users being offered free movies, sporting events and documentaries following deals with content providers around the world.
It will also offer TV shows for free, hours after they have been aired on a TV network. In Australia, consumers will be restricted from having access to certain shows aired overseas due to content deals with TV stations in Australia who often run popular TV shows to air weeks after the same shows have been aired in the US and UK.
Without a sharp discount, Nexus One won’t make much of a dent in the mobile phone market, predicted Forrester Research analyst Charles Golvin. The iPhone has been the biggest source of mobile traffic to Google’s mobile services during the past two years, according to Google executives.
This year in the US, mobile phone advertising has only generated $416 million in revenue. However, analysts are predicting annual revenues of $10 billion by 2013, according to research firm eMarketer.
In the US alone, Google generates more than $11 billion annually from the sale of online ads shown on personal computers. Google hopes to improve its mobile advertising network with the $750 million acquisition of AdMob, a pioneer in the field. That deal is expected to close early next year.
“Mobile is clearly the next big business opportunity and (Google) wants to do everything possible to control its own destiny,” Golvin said.
Several vendors are banking their future on the Google Android platform. The company, which has struggled recently in the mobile phone market, has thrown its weight behind phones running Android with its latest offering selling over 1 million units in six weeks in the USA.
The FCC filing indicated the Nexus One will be compatible with many networks overseas, including the Vodafone, Telstra and Optus networks.