This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

A First Step in Google's New Android Strategy?

NEW YORK ( TheStreet) -- He's baaaaack! No, I'm not talking about a zombie in a scary movie or Mitt Romney's future press secretary, Newt Gingrich.

I'm talking about Google (GOOG - Get Report) selling unlocked Android phones directly again, bypassing the cellular carriers.

Those of you with decent smartphone memories will recall that Google jumped into this strategy once before, in January 2010, with the Nexus One.

The alleged reasons why Google quietly backed away from that strategy was some combination of the following two:
  • 1. Google couldn't handle the customer support. Although this isn't surprising for those who try to get customer support from any of the other free Google services, one would like to think that Google could have walked and chewed gum at the same time, compartmentalizing this product. Or, more likely, it was just a terrible execution debacle on Google's side. I mean, simply offering telephone support, if nothing else, is not rocket science.
  • 2. Google was pressured, or easily bowed to, the carriers such as Verizon Wireless (a joint venture of Verizon Communications(VZ) and Vodafone(VOD)). Again, this seems like a flimsy argument, because other devices are also sold outside carrier channels. Apple(AAPL - Get Report) will sell you an unlocked iPhone, and Nokia(NOK) will do the same. Although these unlocked devices haven't been that popular in the U.S., they can be sold, and U.S. carriers seem to have had nothing to fear here.

Anyway, Google is back for a second bite at the apple here. Starting earlier this week, you can buy the HSPA+ version of the Samsung Galaxy Nexus SIM-unlocked and contract-free directly from Google for $399.

Then you can head to your local Walmart and get a T-Mobile SIM card for $30, which gives you 5 gig of HSPA+ data, unlimited overage, unlimited SMS, and 100 minutes for circuit-switched calling.

Over two years, you'll spend a fraction of what a device like this would cost you on a major carrier contract.

Just as a reminder, the Samsung Galaxy Nexus is one of the few Android smartphones shipping with Android 4.0 -- and it was the only one until about a month ago.

So why now? Last August, Google announced its intent to acquire Motorola Mobility Holdings (MMI - Get Report).

As I wrote last August, this acquisition means Google will attempt to become a more vertical company by incorporating a direct sales model, perhaps all the way to the point of opening stores similar to the Apple and Microsoft ones.

What we saw from Google this week may be an indication that it may have some big plans in this regard after it closes this acquisition, something rumored to happen within the next 30 days.

What is Google's dilemma here? The eternal dilemma of an operating system provider is that it is extremely difficult to try to be "open" and to have one's own hardware. Apple had a big debacle trying to thread this needle in the early 1990s, and Palm had the same problem in the late 1990s. These initiatives are widely believed to have been monumental disasters.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $117.81 -0.19%
GOOG $750.26 0.28%
MMI $33.47 -3.04%
FB $105.45 0.04%
TSLA $231.61 0.86%


Chart of I:DJI
DOW 17,798.49 -14.90 -0.08%
S&P 500 2,090.11 +1.24 0.06%
NASDAQ 5,127.5250 +11.3820 0.22%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs