Google’s Disruptive Android Strategy

The first Android phone will be announced by Google and T-Mobile tomorrow, September 23 at 10:30 AM Eastern time in New York City.  The phone itself is the HTC Dream branded as a T-Mobile G1. Beyond that everything about the phone is conjecture.  Most rumors put the device in stores Oct 13 at $199 on a two year contract.    Further rumor mongering  predicts UK and German releases, also on T-Mobile in October or November.  There’s also  the potential of a wider Android roll out this year on T-Mobile which operates in 13 countries. Other than T-Mobile, no carriers have confirmed Android launches in 2008.  China Mobile, KDDI, DoCoMo, Sprint, TIM and Telefónica are members of the OHA, the industry consortium backing Android, and all can be expected to launch an Android phone in 2009 with Telefónica likely to be the first.

Carrier adoption is certainly a key factor in Android’s success, but I don’t think it’s the only or even the most important one. Google certainly wants Android to be available through carriers.  Most consumers worldwide currently buy their mobile phones from their mobile network provider and Google needs to be in that channel.

However, I believe that the carrier channel is only part of Google’s Android strategy.  They have a much grander plan to dominate the mobile device landscape and turn the mobile industry’s business model completely upside down.  This strategy involves at least three channels. The first is through carriers. The second and third are direct to consumer and direct to business.  I don’t believe that Google itself will sell Andoid phones.  Rather they have created an OS and adopted a licensing model that enables third parties to effectively build and sell Andoid phones into all three channels.

Google has spent four years and, by my estimate, at least 150 million dollars creating a complete mobile OS and application stack with very advanced capabilities, all for the purpose of giving it away.  And giving it away under a permissive open source license that lets carriers, device manufacturers and system integrators use it, sell it and modify it any way.  Like everything Google or any other business does, they are doing this because they expect it will make them money, lots of money.

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