The Nexus One has landed: telecomms companies, beware!

Google sent me one of the unlocked developer Nexus One phones. It arrived today. And, in the wake of recent news about Verizon not after all carrying the Nexus, stimulated some interesting thoughts in my mind about where the cellphone market is going. The balance of power is changing fast in ways that are going to be very good for consumers.

Let’s start with the microlevel. Here is what switching over to the Nexus One from my G-1 was like:

(1) I plugged in the Nexus to charge its battery.

(2) While it was charging, I enabled WiFi and entered the WEP key for my house wireless network and my Google account credentials.

(3) Over WiFi, without a sim card in it, it automatically synced my contacts from Google.

(4) I grabbed a couple of apps that I actually use from Android Market.

(5) I popped the backs off both phones, moved the sim card from one to the other…and everything just worked!

(It also took an over-the-air firmware update during this sequence. I had that as step 2, but a commenter pointed out that I must have misremembered the timing, because it would need the sim card in. I think what happened was that I remembered the update happening right after a boot, but forgot that it was the second boot – I had to pop out the battery to put the sim card in.)

This how it should be. Easy transition, mostly automatic, with the only hand-work required being things I hand-customized on the G-1. Notice what I didn’t have to do, which was throw myself on the tender mercies of my cellphone provider begging for (a) permission to change handsets, or (b) the magic keys to cross-load my contacts list and other data from the old phone to the new one.

The only thing I had to do that was even a bit mysterious was mount the Nexus’s SD as USB mass storage (which Android supports nicely) and drop my custom ringtones in Android/media/audio/ringtones, creating those directories beneath the pre-existing Android directory on the SD card. The only capability I lost was the app to manage my T-Mobile faves list (the five numbers I get free calls to) from the phone, and it turns out I can do that from my account on T-Mobile’s website…through the Nexus browser, if need be. No big deal since I’m not even allowed to change that list more than once a calendar month.

Yeah, sure, so that customized T-Mobile firmware was adding a lot of value to the G-1…not.

Which brings me to the larger topic of this post: how the balance of power between consumers and Google and the telecomms providers is changing, and what that means. Part of it is already expressed: I didn’t have to ask permission, I didn’t have to pay fees, I didn’t have to kiss a T-Mobile salesbeing’s ring…I just did it. Tremble, telecomms providers, because Android is a honey trap; it saves you truckloads on your engineering budget and dramatically improves your time to market, but it is already inexorably eroding your ability to lock in and gouge your customers.

At $529 the Nexus One is too expensive to affect the mass market directly – I couldn’t have justified buying one myself if Chris DiBona over at Google hadn’t generously opted to include me in a recent run of promotional giveaways. But it has broken the ice. Unlocked Android phones will get less expensive on a Moore’s-Law curve, and even while they’re still early-adopter toys they’re going to reshape consumer expectations about who gets to control what.

As that trend accelerates, it’s going to be interesting times out there. Consider, as a harbinger, Google’s dealings with Verizon.

We’d been hearing for months that Google and Verizon were going to do a deal on a Verizon-branded Nexus One. Then, last week, one of my spies confirmed that it was so, reporting that a friend of hers was involved in the field tests of the Verizon Nexus One. She told me “It’s crippled. The Verizon firmware is seriously inferior to the stock Google Android build.” My spy has a Google Nexus One like mine, and had seen the Verizon prototype in operation, so she was speaking from direct knowledge.

We both marveled at this. While it was certainly consistent with Verizon’s past behavior (lock in customers, then use the limitations of their handsets to hawk them stuff – like, custom ringtones because you can’t just download any old soundfile you want) it seemed to both of us like a stupid, self-destructive stunt to be pulling when the customers would have ‘pure’ Googlephones to compare the Verizon marque to.

Then, on 26 April, came word that the deal had been canceled and that Google was telling disappointed prospective customers to go buy Motorala Droids. When I heard about this, I assumed Verizon had had an attack of even more suicidal idiocy and backed out. But now it appears that, in fact, Google walked away. Verizon is now trying to pretend that it was never interested and all the hype was Google just fantasizing. But, thanks to my informant, I know better. Verizon had a prototype and Google killed it.

Here’s what I think actually happened….

Step One: Verizon latched on to the Nexus One’s new hotness for the same reason Android looks irresistible to almost every other telecoms provider in the world – huge savings in development costs, huge improvement in time to market, prospect of an app ecology adding value to it, and the open sourceness means Verizon couldn’t be locked in by a predatory upstream vendor. (As I’ve noted before, fear of the latter is the reason the telecomms outfits told Microsoft to stuff Windows Mobile up its own ass.) Note that these advantages were powerful enough to win the argument with iPhone – in fact, Verizon might very well have wanted an Android line specifically as a way of denying Apple power over them.

Step Two: Because Verizon is who it is, they proceeded to piss and shit all over Android until they liked the flavor better. And, as my informant reports, crippled it to a ludicrous degree.

Step Three: Google looked at the resulting mess and said “Not under our co-branding you don’t.” Sure, the code is open source, and Verizon could ship the prototype – but without Google’s imprimatur to divert attention from the scar tissue and holes where Verizon locked stuff down and ripped stuff out, there was no way for the product to be anything but an epic fail. There were probably other levers as well; losing Google’s engineering support would have hurt, and access to the app store might have been in play. Doesn’t matter; the point is, Google had enough leverage to abort the product launch, and they did.

The trade press is calling this a setback for Google. That is absurdly wrong, as demonstrated by the fact that Google can tell Verizon customers to go buy, instead of the cancelled Nexus One…another Android phone! Verizon is the loser here, not Google. Verizon tried to subvert Android, to flim-flam Google into propping up the walls on Verizon’s garden, and it failed.

The significance of this should not be missed. Eighteen months ago, when the G-1 was a prototype with a doubtful future, Verizon would have held the whip hand over Google; now, control of the smartphone market has shifted. You can stick a fork in the telecomms providers’ walled-garden strategy, because it’s done — and with it, all the lock-in and price gouging that they love so much. Google has served notice: it’s not going to tolerate the crippling of Android to protect anyone else’s margins, and it doesn’t have to. Because there are no realistic alternatives left, even for the exclusive iPhone provider (AT&T offers an Android phone, too).

Google has played a long game, and played it extremely well. (They can afford to; as I’ve noted before, the grand strategy around Android doesn’t rely on them making one thin dime in licensing fees.) They threw Android to the telecomms companies with barely any strings attached. They slow-balled Android’s introduction with the G-1. They knew that the economics of open-source development gave Android a bone-crushing advantage over proprietary systems, and they gave half a dozen telecomms providers time to figure that out and talk themselves into Android-centric strategic bets. They then tolerated a certain degree of initial fragmentation in order to allow their business partners the illusion that said business partners would control the pace of the roll-out, and get to selectively opt out of Android’s openness.

That illusion of control was persisting on borrowed time the day Google started selling the unlocked Nexus. Now it’s dead and in the same grave with the Verizon deal. Watch for Google to quietly but mercilessly increase the pressure on its business partners, and for updates and feature additions to effectively pass out of its’ partners’ control. Nine months from now, if you’re using any Android device later than a G-1 (which has hardware limitations that matter), you’ll be running the latest version of Android; talk of “fragmentation” will have faded like mists at sunrise. On about the same timescale, expect the cost of unlocked Android phones to drop below $200, at which point the market viability of locked phones will collapse. Telecomms providers will then lose control of the firmware entirely.

Of course, this is all good news for consumers. I started this post with a blow-by-blow description of how the G-1 and Nexus have empowered me (Yay! A phone upgrade that doesn’t feel like undergoing root canal!). This is what Google wants – frictionless phones, frictionless Web, and to commoditize all the co-factors in its advertising business. That means, as I’ve pointed out before, bludgeoning the telecomms providers into being nothing more than low-margin bit-haulers with the customer firmly in control.

It’s not just “Don’t be evil!”; as a matter of grand strategy, it’s in Google’s interest not to allow anyone else in the telecomms sector to be evil, either. And that’s good news for all of us.

67 thoughts on “The Nexus One has landed: telecomms companies, beware!

  1. 1) Verizon is not the exclusive iPhone provider; AT&T is.

    2) Looks like American wireless telecoms is finally joining the late twentieth century. The lock-in and price gouging that’s normal for Americans is virtually unheard-of in Europe, where SOP for travellers is, you carry a cellphone from country to country, swapping SIM cards tied to dirt-cheap pay-as-you-go no-strings-attached plans at the borders.

  2. Also worth noting is that AT&T provides an Android phone: the Motorola Backflip. It, too, is crippled: apps can only be downloaded through Android Market. (If you have USB debugging enabled, I think it’s still possible to put non-Market apps on with your PC via USB debugging.

  3. Oops, you’re right. Should not post so late at night; I will correct. Fortunately it affects the logic of the argument not at all.

  4. After spending several years working in various parts of the globe not in the US, I’m entirely adjusted to unlocked phones and swapping SIM cards as I change locations. I was able to justify buying an unlocked Nexus One because of the abilities it gave me as a smartphone, coupled with a complete divorce from carrier limitations. I’ve been carrying it for almost three months now and couldn’t be happier.

    I’ll certainly admit that supporting the unlocked cell phone market in the US and the Google long strategy was a positive selling point for me and helped justify the additional expense.

  5. I think you’re being optimistic, Eric. Providers aren’t going to give up control over their customers’ feature sets without a horrendous fight, the beginnings of which we’re only now seeing. The same goes for firmware rollouts and the like. Until consumers don’t have to get their firmware updated from their carrier, the Android market will remain fragmented.

    The Nexus One’s not being available for Verizon customers won’t matter unless the Nexus One itself reaches iPhone-class levels of consumer desirability. Until then, Verizon will sell all the Droids it wants to, and consumers will still be locked into Verizon’s ideas of what they should be allowed to have.

  6. “bit haulers” – I like that. Between Android and Maemo/Meego there is huge scope for such a shift in the telecom business model. I expect the concept of voice/data plans to evaporate – it’s all data, stupid….just voip your network and be done with it. Seamless, ubiquitous TCP/IP comms.

  7. A couple of thoughts:

    1. Isn’t the Droid’s stock loadout fairly Verizon un-mangled? That, or they did it so skillfully, the Droid owners I know haven’t complained terribly about it. If you’re correct, I seriously wonder how badly Verizon screwed the pooch in dealing with the N1 development/deployment. I’m thinking Verizon may more be banking on the next iteration of the Droid.

    2. The Nexus One would be a great platform (along with the upcoming Evo on Sprint) if they’d actually included a damned hardware keyboard instead of the on-screen monstrosities that seem to becoming the norm (curse you Apple!). I certainly hope this isn’t a trend with the hardware manufacturers that Google seems to be supporting heavily. There are more than a few of us out there that can’t handle non-real keyboards.

    3. WEP, Eric? Really? WPA2-AES has been around for a while now. I would think you’d be running something a touch more secure. (meant ha-ha-only-seriously, not to be taken as a harsh WTF)

  8. I think you’re being optimistic, Eric. Providers aren’t going to give up control over their customers’ feature sets without a horrendous fight, the beginnings of which we’re only now seeing.

    But they already have. iPhone actually opened this door: AT&T gave up most of the control of the iPhone to Apple. This is exactly the reason why Verizon turned down the iPhone: Verizon didn’t want to give up control of any handsets and Apple wanted all the control. That’s why Apple was forced to talk to AT&T. But Jobs did it and convinced AT&T to give up control of the iPhone. (There’s a Wired story that lays all this history out somewhere).

    All it takes is one provider: given enough market interest in a handset, other providers will follow suit because of the one thing the providers hate: customer churn. That’s the consumer’s big stick over the providers and it’s what keeps providers twisting themselves into knots trying to keep customers.

    They’ll do it with the Android, no problem.

  9. I think you’re misattributing to Android what is largely a feature of GSM.

    You mention that the major pro-consumer feature is that the consumer can purchase any phone they want without interference from the phone company, can swap SIM cards, and then ~immediately start using the new phone. The phone company thus can’t restrict what phones you use, what features are present on the phones you use, and can generally go fuck themselves.

    That’s GSM. That’s T-Mobile and AT&T.

    Look at Verizon, Sprint, and the other CDMA phone companies, and none of the above is possible. There are no separate SIM cards; the CDMA equivalent is built into the phone and can’t be removed.

    Result: if you do manage to purchase a new CDMA phone, you MUST contact your phone company to activate it so that it can be used on their network. If they want to refuse or delay (for “testing”), they can.

    What Android brings here is Over The Air updates, and that isn’t even exclusive to Android (Palm Pre does the same thing). Storing contact information in “the cloud” is nice, but also isn’t exclusive (Palm Pre as well), and GSM allows storing contact information within the SIM card, lessening the chore of migrating contact information from your old phone to your new phone.

    The one limitation here, Android doesn’t solve either (nor can it): frequencies. Specifically, since both AT&T and T-Mobile use GSM handsets, you can take a phone bought from one provider, a SIM from the other, and it’ll Just Work…for voice calling and EDGE data. 3G data will NOT work, as AT&T and T-Mobile use different 3G data frequencies. Perhaps 4G will change this, but for now 3G data is “tied” to a single phone company. (If you don’t care about 3G data, then you can change providers at will, but I do care about 3G data…)

  10. Eric,

    I agree with you on everything except one point: the time-scale for unlocked phones to drop to $200. I think this will happen eventually — maybe 5 years out. None of the device manufacturers want this — they keep coming out with more high-end devices, that cost real money to manufacture. The screen technology used is still both expensive and rapidly changing.

    I’m looking to get an Android device, myself, and find the Nexus One lacking. I personally need a physical keyboard, and would rather not use a current-gen OLED display (they stink in sunlight). And there are issues with the Nexus One display as well that I don’t like (http://arstechnica.com/gadgets/news/2010/03/secrets-of-the-nexus-ones-screen-science-color-and-hacks.ars). I want to start writing mobile web apps, and really don’t want a proprietary device.

  11. Dan: I think Sprint is heading in the direction you’re suggesting with it’s purchase of Clear (then Clear Wire) last year (or was it year before last).

    Having worked for a Motorolla Wi4 reseller, I know that Moto’s main thrust is toward an entirely TCP/IP based network. They are REALLY wanting to drop all the other dead tech (can you say “iDEN”?) and head in a direction that they know will be sustainable long-term. They’ve maintained their proprietary encoding on older systems (e.g. Canopy) but they are now getting really deeply involved in the standards bodies to make better standards for Wireless communications systems, with them being the premier manufacturers for carrier class systems.

    So, basically, Moto is attacking the network side of the carrier equation, while Google is attacking the handset side. I think in the next year or two, as they complete their 4G network build-out, you’ll start seeing Sprint pushing customers to their Clear network for voice as well. In fact, on the latest phones, they are already using this for internet connectivity. Sprint will be the carrier that breaks the monopoly (just as they were the ones who took on Ma Bell in the late 70′s).

    Of course, I could be wrong ;^).

  12. No comprendo.

    I thought the collapse of the Google-Verizon deal was bad. Everyone said so. Then everyone starts raving about the Droid Incredible – saying it’s what the Nexus should have been. But it’s on Verizon. Is it totally crippled like the Verizon Nexus One would have been? Then how can it be so great?

    Out here, Verizon is the only player if you want 3G data. AT&T only has Edge and evidently has no plans to change that.

    So will I /ever/ be able to get a fully capable smartphone with fast data?

  13. I was about to say that I thought your imagined near future price point of $200 was insanely low. However, thinking about it, there is a glut of tablet type devices headed to the market in the $200-$300 price point, so perhaps I am wrong. I am sure the phone circuitry doesn’t cost much, so I am really not sure why these phones are so expensive. I guess they are just value priced in a low competitive market (for unlocked phones.)

    However, a point worth considering, one certainly true in the US market, is that consumers prefer leased prices over single prices. We buy everything on credit, or credit like instruments. It is pretty much assumed that “car payment” is an expense on your family budget, because people don’t buy cars. Heck, they don’t even buy stoves or refrigerators.

    Consequently, the “low, low monthly payment” model for cell phones works considerably better for American consumers. Perhaps some non Americans can give an indication of what it is like outside the market I live in.

    Although I like the whole idea of the liberty that unlocked phones offers is appealing to me, I think our modern day Patrick Henry would more likely say “Give me liberty or give me a timeshare in Florida.” Thank you public schools.

    In summary Eric, the word “Pollyanna” jumps to mind, but I hope you are right and I am wrong.

  14. Re: GSM by Jonathan Pryor

    Actually, swapping the SIM card is part of GSM, but not the rest. I can, right now, go buy a droid from Verizon, enter my gmail credentials, and it’ll update everything to that phone, including settings and apps. This is a feature in Android 2.x. It’s that easy.

    The SIM card part is interesting, but as you say, has been around for a while via GSM. European cell phone users swap SIMs all the time. Some even swap phones, but they are usually not smart-phones (or maybe one is, but the others are not).

    Android makes swapping smart-phones easy, though not super fast (it takes a few minutes for everything to sync up depending on what you have).

    Ciao!

  15. I find it amusing how both ESR and Rob Landley keep mention they got “unlocked” phones. All the nexus ones are unlocked. Both SIM unlocked and bootloader unlocked. Unlocking the bootloader requires using some command-line voodoo, but that’s not a big deal to someone who wants to run a non-default Android version.

  16. @esr

    WEP, Eric? Really? WPA2-AES has been around for a while now. I would think you’d be running something a touch more secure. (meant ha-ha-only-seriously, not to be taken as a harsh WTF)

    Yeah, I thought of mentioning that too, but didn’t want to come across as pretentious. WPA2-AES (or WPA2-TKIP+AES if you have TKIP-only devices like a Nintendo DS) is actually quite a bit more secure than WEP. WEP’s short key length makes it way too easy to crack and there are, in fact, programs out there that automate the process.

  17. JCB Says:
    > There are more than a few of us out there that can’t handle non-real keyboards.

    Wikipedia says average computer users type 23 to 40 words per minute, but only 19 words per minute when composing original text. It also says “search-and-peck” typists (those people who have to visually hunt for each key before pressing it) type at 27 wpm when copying text (and presumably slower when composing text).

    What this tells me is: average computers users don’t care about the physical keyboard vs virtual keyboard question. Because being forced to hunt-and-peck on a virtual keyboard doesn’t slow them down much if at all. No surprise then that most iPhone owners in my experience seem happy with the virtual keyboard (or at least unaware of — same thing for this discussion).

    Sure you may care about touch typing by feeling the keys, but by the fact that you read this blog we already know you aren’t a typical computer user.

  18. The interesting thing is how it will go in countries without the US’s crippled and straightjacketed mobile phone market, i.e. Europe. People are used to a lot more freedom here in the UK.

    My girlfriend just got a BlackBerry 8900 for £0 on a two-year £25/mo contract, with a free iPhone upgrade in a few months included. I am seeing why they’re called CrackBerries – it’s already surgically attached itself to her hand and sent control probes into her brain. When I wrestled it away from her for a short time, I found it was the first smartphone I’ve ever used that I could reasonably read and write GMail on.

    It’s got a 500MHz CPU and 256MB. No 3G, but wifi is all but ubiquitous here. So how much hardware does a decent Android experience require?

    Same problem the Microsoft ZunePhone^WKin will have in the UK – you can get better phones free, so how are they going to get customers with the World’s Dumbest Smartphone? Pay people to take it?

    I haven’t seen any super-cheap Androids here yet, but Moore’s Law is proceeding relentlessly. I expect there’ll be one ready for my next upgrade early next year.

    (I actually got a Nokia 5800 and gave it to someone else. I’m still using an ancient dumbphone that does VOICE and TEXTS. But I could be convinced for something as good as that BlackBerry.)

  19. Yes, you attack a cartel by going after the weaker members first. Once Cingular (to-become-AT&T) signed on to the iPhone, carrier domination of user experience was on the way out. In a way, the technological split in the U.S. (CDMA vs. GSM, plus the GSM frequency issues) is making it harder to break things up here. But it’ll happen eventually.

    I am amused that Google recapitulates, almost exactly, Apple’s experience of three years ago. Apple approached Verizon (with the not-quite-finished iPhone) and walked away because Verizon insisted on total control of its subscribers. Both Apple and Google decided that defending their customer-facing reputations was more important than gaining access to Verizon’s market. At this point, Verizon’s corporate culture really does seem to say “we’d rather die than stop owning our customers.” I do wonder about their mid-term strategy; they are caught in the mother of all innovator’s dilemmas…

    Meanwhile, it strikes me that Google and Apple are allies in the fight to commoditize carriers, while competing for mobile platform mindshare. From the point of view of the carriers, this is a crazy scary situation: Google attacks from the commodity side while Apple siphons up all the oxygen on the high-margin side. Their only chance would be to play the two companies against each other somehow, but I don’t see any carrier having enough to offer to either of them. (In fact, perhaps that’s what Verizon tried to do just now. Good that it failed.)

    Cheers
    — perry

  20. RE: The Doctor What

    But you somewhat missed my point. My point was what ESR originally wrote:

    “how the balance of power between consumers and Google and the telecomms providers is changing, and what that means. Part of it is already expressed: I didn’t have to ask permission, I didn’t have to pay fees, I didn’t have to kiss a T-Mobile salesbeing’s ring…I just did it.”

    So, what if you bought a CDMA phone from Sprint, and you want to use it on Verizon? You can’t “just do it,” ~by definition. You MUST talk to Verizon and ASK if you can use YOUR phone on THEIR network, and they COULD deny you. (How probable that is, I can’t say, but you certainly MUST ask them in the first place or you’re not placing any calls at all on Verizon’s network.)

    Compare/contrast with GSM phones, where you CAN buy a phone from ~anywhere, buy a SIM card, swap it, and start using it ~immediately WITHOUT asking for permission, paying any fees, or anything else.

    The PRIMARY pro-consumer aspect here is PREDICATED upon GSM. It can’t (currently) be done with CDMA. (It likely never will be done with CDMA either, as Verizon will be moving to GSM for 4G…)

    That Android will sync all your contact information is just icing on the cake. The primary pro-consumer bits are all GSM.

  21. >The Nexus One would be a great platform (along with the upcoming Evo on Sprint) if they’d actually included a damned hardware keyboard instead of the on-screen monstrosities that seem to becoming the norm (curse you Apple!).

    I was actually worried about this when I contemplated the Nexus One – the physical keyboard on the G-1 sucked, but I liked it over the soft keyboard anyway. So far it’s not a problem; the Nexus firmware is just enough better at the job to remove the pain-in-the-ass factor. Voice input everywhere helps.

  22. Re: Jonathan Pryor

    I was under the impression that GSM had the following “features”:
    1) Phones must be “SIM unlocked” to allow any SIM in it. That is, I can’t give a contract-bought T-Mobile phone to an AT&T user and expect it to work. The Nexus One is SIM unlocked.
    2) That SIMs can be locked to phones as well, so that a SIM can only work with a new phone if the carrier approves the switch. Specifically, I seem to recall that AT&T had special “unlocked” SIMs that they would sell you. Hmm….a quick google doesn’t back this up.

    Hmm…maybe I’m think of the international SIM card: http://www.1800mobiles.com/international-sim-card.html

    Interesting read: http://www.wisegeek.com/what-is-the-difference-between-gsm-and-cdma.htm

    I also thought (probably wrong) that the SIM card was part of a different standard that could be applied to CDMA phones as well. I remember GSM phones being called GSM/P__ phones originally….the P acronym is what the SIM card was part of…

  23. There’s actually nothing that prevents CDMA handset from utilizing SIM card. The current implimentation is just not using it.

  24. The Doctor Who: GSM phones are locked and unlocked in the same way. The equipment to generate the keys are generally $200-500, so there’s almost always a fair number of folks on Ebay, etc. that will generate the keys for you (usually $10-$50 dollars depending on the phone and manufacturer).

    The “unlock sims” are simply sims that are programmed with the unlock code. You swap your current sim for the unlock sim, turn on the phone, then turn it off and switch the your old sim (or your new carrier’s sim). The Sony Ericson I gave my wife a few years ago had to be unlocked in this way to move from AT&T to T-Mobile. Cost about $25.

  25. RE: The Doctor What:

    (1) Yes, phones are often SIM locked and require unlocking in order to use with a different SIM. However, you can ask your phone carrier to unlock your phone and they’ll often do so. I had no problem getting the unlock instructions for one of my previous AT&T phones, and I’ve heard of no problems unlocking T-Mobile phones either. If you’ve been a customer long enough, it generally isn’t an issue (afaik).

    The fundamental problem with CDMA is that the SIM card equivalent isn’t removable; it’s builtin to the phone and can’t be changed. This is why moving CDMA phones between carriers requires carrier involvement. GSM phones can be locked (as mentioned before and elsewhere), but at least carrier movement w/o carrier involvement is theoretically possible, unlike CDMA.

  26. The fundamental problem with CDMA is that the SIM card equivalent isn’t removable; it’s builtin to the phone and can’t be changed.

    Actually, that’s not true with all CDMA phones. Most of the more expensive CDMA phones from LG and Motorola use a removable SIM card (mine does), though I’m pretty sure the SIM cards are not compatible between manufacturers.

  27. RE: Morgan Greywolf

    I wasn’t aware of that, and that’s good to know. However, SIM cards that aren’t compatible between manufacturers rather defeats the purpose, no? It might not matter, regardless.

    In order for this to be useful to the user (the whole “I didn’t have to ask permission, I didn’t have to pay fees, I didn’t have to kiss a T-Mobile salesbeing’s ring…I just did it” angle) is that you need to be able to purchase SIM cards from your new phone company. It’s the ability to purchase SIM cards w/o a phone that provides this flexibility.

    At present, you can’t purchase SIM cards at Verizon. (At least, searching for SIM or UIM from their website doesn’t show anything relevant; cf. att.com where searching for SIM shows many matches.) Thus, even if your phone has a SIM card, if you can’t purchase a replacement from a telco you don’t actually have the ability to trivially move between phone companies. Non-standard SIM card interfaces just reinforces the point: if they’re not standard, why would a telco carry them? How could you move to a new telco if they don’t carry a SIM card for your phone? etc., etc.

    So, my point: SIM cards (or equivalent) are a necessary prerequisite to permit decent user-oriented, no telco permission/fees/interference use. Alas, SIM cards are not sufficient either; SIM locking and the lack of standard frequencies work to tie users to their telco (the aforementioned “I can’t take my 3G phone from T-Mobile to AT&T and expect to get 3G data” problem).

    However, it might not matter, at least not now. 1-2 years is a generation in cell-phone advancement and development; it’s quite likely that you’d want a new phone in 1-2 years ANYWAY, and since people appear to prefer leased prices (cf. Jessica Boxer’s comment; I know I currently prefer leased prices, as the “savings” amount to ~$80 over 2 years, which is enough to sneeze at), they’ll be tied to a telco at least until their contract expires, and they’ll change telcos then if desirable.

    Getting unlocked, contract free phones down below $200 may help, but I’m not convinced that it will. Given the choice between contract-free living at $200, or getting a faster, higher-resolution, and overall nicer phone for $200+contract, I suspect people will stick with the contract. At least until sub-$200 phones are sufficiently good that phone manufacturers aren’t competing on performance (which may be the case in 5-10 years).

  28. I dropped Verizon years ago (for Cingular, which made getting an iPhone later painless, but this was before that was a factor) precisely because they sold me shitty phones that claimed mp3 support but required impossible black magic to make a ringtone, and had crippled bluetooth.

  29. @Sigivald:

    Yeah, all the CDMA providers do that. Believe it or not, the “impossible black magic” required to make a ringtone on a CDMA phone is a free download and it runs fine under Wine. It used to run natively on Linux, too, but I haven’t been able to compile it in years due to a required binary-only library that needs libc5. I can post a link if anyone needs it.

  30. I do not know about Android, but I have yet to meet Symbian OS smartphone which actually works with WPA2 encryption. Sure enough, they do have the WPA2 option in the drop-down list and boast about the support in the manual, but try getting it to work.

    I had to create a WEP network and limit access to it by MAC address of the WLANs (a classical whitelist).

  31. Gotta agree with Jay, as long as the cellular carriers retain oligopoly status over the airwaves, all this device interchangeability stuff is small fry. The paradox is that there could be plenty of margins in bit-hauling, if done right, but we won’t see it because oligopolists always want to keep milking the cow, by continuing with the outdated billing by voice minutes or ringtones, not to figure out a better model. Cellular carriers could jump on the video bandwagon and offer different levels of service and meter everything by the MB. Voice traffic would have to have lower latency, so that would require paying for a higher service level, while video would bring in money by the mbit. If the wireless carriers and wireline telcos would just focus on being the best bit-hauler they could be, rather than trying to keep milking outdated models, we would have a lot more internet usage and innovation, but unfortunately oligopolies always slow down such change.

  32. >I do not know about Android, but I have yet to meet Symbian OS smartphone which actually works with WPA2 encryption.

    And the wireless router in my basement dates from 2006; it doesn’t speak WP2.

  33. > (Which is not to say that WPA2 isn’t without vulnerabilities itself, it simply takes much more skill and time to crack.)

    WPA-PSK may have some short-comings, but I don’t think you’ve cracked WPA2.

    > And the wireless router in my basement dates from 2006; it doesn’t speak WP2.

    Thats funny, as of March 13, 2006, you couldn’t mark a wireless router as ‘Wi-Fi Certified” without WPA2.

    http://www.wi-fi.org/news_articles.php?f=media_news&news_id=16

  34. To really frame the discussion of an alternative to the locked in US cell phone market, just look outside the US. Unlocked cell phones (not tied to a particular carrier) are available everywhere and run the range of $20-$50 for a basic phone to $200-$300 for phones with hard keyboards or multi-SIM (having two SIM cards with two phone numbers), to $500-$600 for smartphones, and $800-$1000 for unlocked iPhones. In that marketplace, the unlocked Nexus One at $529 is very competitive.

    You can get discounts on phones by locking in a service contract, or you can be free to surf pay as you go or even contract SIM’s in any phone you choose. I have a variety of phones and SIM cards to suit where I am and how much phone I want to carry.

    When I was back in the states in February, I pulled the AT&T SIM out of my iPhone, stuck it in my unlocked Nexus One, and everything was happy. When I travel to a new area, I find out who has data service, pick up a SIM and some credits, and surf away on the Nexus One, which seems to generally care less what carrier/SIM/phone number is installed.

    There is some irony in the US having the “least free” cell phone marketplace in the “free world”.

  35. How would the Nexus One get an OTA update without a SIM installed and before the WiFi WEP key was entered? Sounds like there is something wrong with the order in which things were done.

    I’ve read that access to the Android Market is determined by the operator details on the SIM, even when accessing over WiFi, which is why people using Optus in Australia needed to use someone else’s SIM to access the Market. Running SIM free sounds too good to be true and certainly beats having activated an iPhone with iTunes before it will work.

  36. I’m with Chris Pugrud here. I read most of this post wondering what the magic was and I still don’t really see it because in Europe phones with removable SIM and removable MicroSD storage card are standard. With those two items being removable changing phones is as simple as finding a new phone and buying it.

    I have just changed from a HTC Hero (android phone) to a Nokia N6600i (symbian) and that was all I needed to do. I have a data only 3G usb stick and I can plug my phone sim into that if I want to (and I expect that if I start travelling a lot more I’ll be buying SIM cards for that from operators in other countries) and so on.

  37. >How would the Nexus One get an OTA update without a SIM installed and before the WiFi WEP key was entered? Sounds like there is something wrong with the order in which things were done.

    Hm, you’re right. The OTA can’t have happened as early as I wrote it down. It did happen right after a boot, though, I’m sure.

    Oh, right. That’s it. I had to take the battery out to put the sim card in. The OTA must have happened at that point, after the second boot. Will correct.

    >Running SIM free sounds too good to be true and certainly beats having activated an iPhone with iTunes before it will work.

    But that definitely did happen – I was making a point of being sure my contact data synced before I moved the sim card. I had data access via WiFi before I had phone. I wasn’t using the T-mobile’s net for the sync, I was using mine (well, my house net and Verizon FIOS).

  38. Yes, technically there’s no need for a SIM at all, which is why your sync worked. Of course, you can’t place calls without one, but there’s nothing to prevent a carrier from allowing some sync traffic to flow between units. Actuually, you can make 911 calls without a SIM…I have verified this.

  39. Oh, you believe you were using WiFi for the sync? Fair enough…but the point about SIM-free calls still stands.

    I also recall seeing a video of some hacker demoing some beta code he’d mashed together – that allowed his jailbroken iPhone to make SIM-free calls…

  40. note from a European perspective: yesterday I found a little box with a collection of sim cards from several european countries I had completely forgotten about. I now realize that I bought twice a portuguese sim!

    How come europe is more free market than the USA in this case?

  41. How come europe is more free market than the USA in this case?

    I think you’re really monkeying around with the concept of ‘freedom’ in this case. There’s nothing preventing the USA companies from modeling themselves after their european counterparts, they just have no business incentive to do so. This is changing.

    There are plenty of dolts, on here and elsewhere on the blogotubes, that point to differences between our respective landmasses and infer bewildering things from them.

    Try saying “no” to a cop in UK/Europe. See how free you are. Shoot the guy that robs/rapes you. See how free you are.

    The business models of private enterprises are hardly damning indictments of our liberty ;)

  42. RE: Federico:

    “How come europe is more free market than the USA in this case?”

    Regulation. Government-mandated standards.

    Imagine that, instead of government mandated and standardized 120V/60Hz power (for the USA), it instead varied depending on who you bought your power from. Buying from vendor A would give power rating A, while buying from vendor B would give power rating B, and A != B. I’m sure power companies would *love* this, as you’d have to buy a new set of ~everything electrical if you wanted to change power providers. (Talk about vendor lock-in!) However, the market would arguably be “more free”, as there wouldn’t be any “silly”/”stupid” government regulation, because regulation is bad, mkay?

    (We had this exact situation over a century ago, when DC and AC were competing with each other. Eventually things were standardized, for which we’re all eternally grateful.)

    So in the USA we have a variety of standards (GSM vs. CDMA), a variety of wireless frequencies (T-Mobiles 3G spectrum vs. AT&T’s 3G spectrum), and the overall result is similar (if not as bad) as having energy-company dependent power: you’re tied to your provider, and moving is difficult. *Useful* Competition is reduced, because the cost of moving is high.

    Compare to Europe (and ~everywhere else), where governments mandated GSM, mandated the 3G frequencies, and thus (in effect) mandated competition.

  43. That’s true, Jonathon, but which is ‘good’ or ‘bad’ ?

    The USA and Europe are radically different geopolitical territories. We may gripe about not being as able to switch between provirs as our European friends, but the griping is really over convenience rather than freedom/liberty. It’s not like we’re some backwoodsy hick nation that still uses morse code telegraphs! We have no right to force a provider to do as we wish. A provider is free to build their business as they see fit. We are free to choose between providers, and between GSM providers we can indeed switch freely, just like Europeans. Business pressures are now the invisible hand that is pushing our providers towards making parallel technological changes – in a much freer marketplace than Europe, where the uber-state has dictated how such companies will operate.

    As things stand, from a consumer perspective, the Europeans seem to be the ‘winners’ because they enjoy the luxury of such convenient mobility between providers across territories…but they have bought such convenience at the loss of their freedom to determine such things for themselves.

    We retain that freedom, have had more inconvenience as a result (yet still have a massive cellular economy), and will ultimately see that freedom move us towards a model of convenience a la Europe.

    I know which I’d rather have.

  44. RE: Dan

    So are *any* government-mandated standards good?

    What about the correct side of the road to drive on? Should that be up for debate on a county-by-county basis?

    What about gasoline purity standards?

    What about Electro-magnetic Field Interference standards? Should we just toss out the FCC while we’re at it?

    “Freedom” is a fairly loaded word; taken to an extreme, there should be no hindrance on my behavior. The result: human sacrifice should be legal (as preventing it would be restricting freedom!). (For double points, what if it’s a religious ritual human sacrifice? Keep government out of my religion, damn it!)

    I suspect that we don’t want to live in a world where everyone has the freedom to do whatever they want. “Limits” are warranted, standards CAN be good, and the freedom to put your head in a noose isn’t real freedom.

  45. How come europe is more free market than the USA in this case?

    In the EU, prevailing thought is that individuals are more important than corporations. In Murka, it’s kinna the reverse…

  46. Dan:
    We may gripe about not being as able to switch between provirs as our European friends, but the griping is really over convenience rather than freedom/liberty.

    As things stand, from a consumer perspective, the Europeans seem to be the ‘winners’ because they enjoy the luxury of such convenient mobility between providers across territories…but they have bought such convenience at the loss of their freedom to determine such things for themselves.

    We retain that freedom, have had more inconvenience as a result (yet still have a massive cellular economy), and will ultimately see that freedom move us towards a model of convenience a la Europe.

    This is comment is not really correct. In the US the regulator (the FCC) did not specify the technology to be used by mobile operators. In Europe the regulator(s) did. That is the key difference. Indeed IIRC the FCC deliberately insisted that competing mobile technologies be used. On the other hand in Europe the regulators and standards body(ies) examined various possible 2G technologies before picking GSM as a single standard that all operators and vendors would need to support. I suspect that one reason why Europe went the way it did was that because Europe has lots of small countries and lots of travel between countries it was obvious that European customers would greatly benefit from having carriers in different countries all running the same phone standard and supporting roaming of handsets from other countries.

    Furthermore (and this one should be laid straight at the door of Qualcomm and Motorola) the non GSM standards (CDMA / iDEN etc.) could perfectly well have been written to support SIMs and hence “plastic roaming” but the vendors possibly with the support of the major telcos deliberately removed this idea.

    ETSI is, IMO, very far from a perfect standards body and its related industry groups such as the 3GPP are probably worse but they do grok the importance of roaming and the correct separation of stuff between different layers of the protocol stack. This means that it has been relatively easy to jack in upgrades to GSM (EDGE encoding for example) and support radically different technologies (UMTS and now LTE) while still maintaining compatibility.

  47. So are *any* government-mandated standards good?…..

    I think we both know of the vastness of the debate required to do justice to such a question ;)

    Whether or not ‘government’ is required to set standards is something I seriously dispute to a significant degree…but ‘standards’ are, of course, often very useful.

    With respect to “freedom” – don’t conflate “freedom of action” with “freedom from consequence”.

    “Limits”? Applied by whom? By what authority?

    …the freedom to put your head in a noose isn’t real freedom

    ‘Real’ freedom? In what way is it ‘unreal’? (I presume you were speaking metaphorically, of course)

  48. This is comment is not really correct. In the US the regulator (the FCC) did not specify the technology to be used by mobile operators. In Europe the regulator(s) did. That is the key difference.

    Errr…isn’t that what I was saying?

  49. In the EU, prevailing thought is that individuals are more important than corporations. In Murka, it’s kinna the reverse…

    Jeff, Jeff, Jeff….you’re a big boy now. Time to put down the “Young Democrats’ Coffeshop Blather Guidebook” ;)

  50. @Jonathan Pryor

    thanks for the clear answer, of course I implied that a common, officialy sanctioned standard is a good thing, but I did not mean to boast about it, as I do not remember how and why it was decided here to settle on GSM as the only standard. I only vaguely remember different telecom adds praising different standards and early adopters of cell phones being mightily confused by them.

    i can provide two general comments though:

    1) Standards are not only a technico-economic issue in Europe. Setting standards was one of the main reasons why the EU (and the ECC before it) was built for. I remember one european election, in the eve of the founding of the new european union, in which a party put out a poster with a picture of a big easter-egg looking multi-plug with more than a dozen different types of plugs, and the caption saying ‘we cannot go on carrying that in our suitcases’.

    2) people here expect things to be standardized. As a recent example, the EU has just mandated a single USB door for all types of cell-phones. If the EU had not acted, I am sure several countries would have implemented such a standard independently.

    More generally, contrary to the way many americans view europe, most people her do no think of the EU as a kind of federal super-state (and opposed to the USA), but as a sort of super-national regulatory board, where petty differences between several countries can be addressed. The catch is that this view is tightly linked to a non-nationalist, ‘progressive’ view of the role of europe. Standards, in this sense, do have deep political and historical roots. My father tells me that when France decided to go with its own standard of colour TV, everybody interpreted it as a sign of French chauvinism, even if no technical question of inter-operability arised.

  51. …most people her do no think of the EU as a kind of federal super-state…

    I suspect that this naivete will haunt such people, and their posterity…

    …The catch is that this view is tightly linked to a non-nationalist, ‘progressive’ view of the role of europe…

    there ya go!

  52. @Morgan: Maybe that’s true now, but by God it wasn’t then; all sorts of docs suggested “encode precisely like this and it works”… but it didn’t. (Theoretically there was no need for a tool, on my particular phone, with a card for the data, but…)

    But that’s okay. I’m never looking back.

  53. One thing to consider is that the Google/Verizon deal died at pretty much the same time Google announced it wasn’t going to pursue further fixes for 3G reception issues on the Nexus One, thus essentially admitting they’re not up to the hardware side of things.

    It really looks like Google and Verizon both walked away from the deal, each for their own reasons (Excessive Verizon control in Google’s case, not investing too much into what is essentially dead-end hardware in Verizon’s). Long-term, Google’s bid to become a phone hardware provider is dead, but Android itself looks to become a dominant player on other hardware.

  54. Well this is some interesting analysis.

    ESR if you are right Google is brilliantly using the strength of the open source approach to succeed in smartphones.

    This almost seems like a classic textbook case: Apple’s closed approach vs Google’s open approach. Which one will prevail? Can they both succeed perhaps?

    I think Palm and RIM are the ones who really should be wetting their beds.

    BTW, what does everyone think of Apple blocking Flash on IPhone. I read Jobs letter and he makes a compelling case:
    Flash is buggy. It is the number one reason Macs crash.
    Flash eats away at battery life.
    Flash is designed for pc’s with mice, not mobile devices with touch screens.
    Flash has all kinds of security holes.
    Flash is designed for cross platform use, Apple naturally wants stuff for their platform only.
    Flash gets between the users and the developers, and results in crummy apps.

    I think this is a smart move by Apple.
    Everybody hates Flash right?

  55. Google is no angel; it’s just another giant company vying for market share and trying desperately to achieve lock-in. Whether you’re locked into an open-source or closed-source platform is completely irrelevant. Unless you actually have the skill to write your own cell phone, it makes no difference.

  56. Jeff Bonwick, come on, you’re better than that: how do you get locked into an open source platform? You don’t have to write your own cell phone, somebody from Taiwan can take the Android source and port it for you. I do agree with your broader point about staying skeptical about Google though, I just think you chose a bad example. Despite the many good choices Google has made, such as fighting for device interoperability and open access FTTH, and the fact that there is essentially no lock-in for search, their main product, their goal of collecting all your personal information so that they can mine it for better advertisements is fundamentally scary. It’s why I don’t use Google Accounts and any of their connected, non-search services to this day. However, micropayments will kill off all these silly advertising models someday soon and I can just as easily pay a cent for every 10 google searches instead, so I don’t think that’s going to work out too badly either. :)

  57. This almost seems like a classic textbook case: Apple’s closed approach vs Google’s open approach. Which one will prevail? Can they both succeed perhaps?

    They will both succeed because they are not competing directly. Google is going for ubiquity; Apple is consistent with its vision of building the device that should exist, not simply another to compete with those that already do. Hence we will see Apple retain the high end and Android take over the low end of the smartphone space.

  58. Darrencardinal, you are correct; and I reiterate that Apple is succeeding in what thousands of fosstards all over the world couldn’t do: getting crufty old Flash relegated to the dustbin of history.

    Being the most innovative computer company on the planet has its perks when you want to get shit done.

  59. >>> Hence we will see Apple retain the high end and Android take over the low end of the smartphone space.

    That might happen in the short term, but in the long run that seems like an unsustainable balance.

    If Eric is right about this, then Google’s Bazaar should ultimately prevail over Apple’s Cathedral, or walled garden as he sometimes says.

  60. Coming to this discussion late – wanted to point out that it IS possible to make calls on the Nexus One without a SIM card. Get a SIP account and use SIPDroid, SIPAgent, or Fring if you already use Skype. This depends on a good wi-fi signal,and like all VOIP phones I notice a bit of latency, but otherwise it works fantastic, and both SIP clients integrate well into the phone & contacts apps. With a little digging you can set the thing up to use Google Voice for both incoming and outgoing calls, and thus talk free everywhere.

  61. Google had to stop selling the Nexus One, the telcos demanded it.

    Next question!

  62. >Google had to stop selling the Nexus One, the telcos demanded it.

    Er, what’s your evidence that it was due to telco pressure? I think this is unlikely, for two reasons: (1) it’s going to sell through retailers, so the most the telcos could have accomplished is to move the problem; and (2) what could they have used for leverage against Google, anyway?

  63. Immediately after acquiring the BACKFLIP inside the mail I was delighted yo know I could update the new firmware. I missed the rush, and it was lucky. I’ve had the Backflip for around a 30 days a number of things 3 or 4 crashes in the month not lousy for 15-20 apps open New WIFI details, and a larger edge dada than prior Nokia E61 and N93 Excellent that the BACKFLIP carries a flex keyboard, the screen is usually a bit tough for the edges. You get 500 messages per day from Twitter, Facebook, Yaho, and who actually else yopu want. If you’ve got 30-60 true good friends, this can be a great cell phone if you have far more it’s going to grab too a great deal info. Just a 30 days but a wonderful telephone.

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