T-Mobile announced the G-2 yesterday. They were, of course, the first carrier to ship an Android phone when they released the G-1 back in 2008. I think this announcement signals yet another phase change in the smartphone wars, in which carriers begin to back off the proprietary skins that have disfigured recent Android releases.
Press coverage has it that the G-2 is an HTC device and will run a vanilla, un-skinned 2.2. The hardware news is unsurprising; the G-1 was an HTC Dream, and an excellent fit for purpose. Rumor all along has been that the G-2 would be a branded variant of the HTC Magic.
Vanilla 2.2 bucks a recent and unhappy trend of carrier devices running down-version Android with heavy skinning and (often) lockout of much-desired features like tethering. I predicted this trend wouldn’t last as customers caught wise and began to vote with their feet, and the G-2 is significant because it gives them a major-carrier device to run to. Inevitably, the G-2 will increase market pressure against skinning.
On that account, here’s a cautious cheer for T-Mobile. My wife and I became T-mobile users to get the G-1, and it must be said that they’ve they’ve been notably non-unpleasant by carrier standards. Coincidentally, we reached the point of needing to decide whether to re-up with them in the week just before the announcement, and swiftly agreed it was a no-brainer. Their coverage meets our needs and their rates aren’t silly. They get additional points for two things: (1) It wasn’t difficult to get them to unlock my G-1, policy is that any customer in good standing can have that after 90 days and (2) when I got my Nexus One the service rep I talked with not only didn’t give me crap about changing phones on a plan designated “G-1”, he sounded frankly envious that I’d gotten an N1 to play with.
Yes, you’re catching my implication correctly; I actually like my cell carrier. T-Mobile still pulls crap like charging mucho bucks for SMS when the incremental cost of the service to them is zero, but compared to the sleazy control-freak moves their competition routinely gets up to they’re actually pretty nice.
The personal report has a larger point lurking in it. When you’re the number 4 carrier, perpetually derided as playing catch-up and scrambling for market share, one of the ways you can compete is by – gasp – not treating your customers like shit. And not actively crippling the devices you ship. This seems to be the route T-Mobile is going.
There are features of the evolving smartphone market that are pushing in this direction, anyway. One is the increasing release tempo, driven by the number of handset manufacturers who want to get in on the action. Symbolically, Nokia just sacked its CEO; as one of my commenters correctly noted, “No doubt this is a direct result from the failure to compete in the US smartphone market”. They’re going to be trying harder. This means that time to market is going to become an ever more pressing issue for new hardware rollouts, increasing the opportunity cost of vendor skinning.
Sure, the vendors can try to put the brakes on the hardware-release tempo. But unless they actively collude it’s not going to happen – there’s too much marketing advantage to being first to hit the street with sexy new hardware, as we’ve seen for example with the EVO 4G, and the handset vendors will be upping the tempo in response to competition in their market. As product cycles shorten, increasing deadline pressure on the Android porting process means vendor customization costs are going to rocket, negating a significant part of Android’s cost advantage.
We can be very specific about the issues with vendor skins. Their only advantage to customers is in the opportunity to improve stock Android’s user interface, which is a weak justification because it doesn’t actually suck to begin with. The problem is that they function mainly as cover for various forms of carrier control. In increasing order of annoyance, we can list (1) obtrusive branding, (2) uninstallable advertising/crapware paid for by business partners, (3) hijacking of the appÂ store, and (4) data-usage caps, especially disabling of tethering and WiFi hotspot features.
Customers are bound to notice what a shitty deal this is, creating a marketing opportunity for a carrier that’s willing not to play these games. The true significance of the G-2 announcement is that by trumpeting stock Android 2.2, T-Mobile is kicking its competitors right where it will hurt and shortening the lifetime of the skin-your-phones-skin-your-customers strategy. As I’ve previously noted, I think Google is counting on this dynamic.
If carrier skins actually functioned as effective differentiators they’d be better able to justify their increasing opportunity costs. But the carriers’ own marketing suggests they’re not – notice how hardware-focused their new-product pitches are? One suspects that various attempts to hype their custom interfaces didn’t survive focus-group testing, and no wonder when they mainly subtract value rather than adding it.
In sum, I predict that the smartphone wars are about to enter phase three. Phase one began with the Android launch and was dominated by a face-off with Apple iOS that Android won, rocketing past it in U.S. market share and reaching global market-share parity (soon to be dominance). The theme of phase two, which began a few months before the Nexus One was canned off Google’s web store, was increasing attempts by carriers to stuff the Android genie back in the bottle by skinning.
Phase three begins with the G-2 launch and will feature an accelerating collapse of carrier attempts to control and corralÂ Android. They’ll be ended by customer pushback and time-to-market pressures on product development. This will throw the carriers into the exact kind of competition they most want to avoid – directly on price and quality of network provisioning. Bad news for them, but great news for everyone else.