Bad news came today for fans of the Google phone, and Verizon Wireless. It really is too bad, as the phone looked to be very nice and certainly would have been very popular. But this is not the first time I have seen Verizon make a major change in a line, after expressing telling the sales staff that a product would be arriving soon.

[Bloomberg]

Verizon Wireless, the largest U.S. mobile-phone company, retreated from plans to offer service for Google Inc.’s Nexus One phone, saying it will focus on other Android-powered handsets instead.

Until this morning, Google’s Web site showed that the Nexus One would be available through Verizon in spring of 2010. The site now points Verizon users seeking phones that run Google’s Android operating system to HTC Corp.’s Incredible model.

Without a Verizon partnership, Google loses access to the carrier’s more than 90 million customers, potentially blocking the phone from gaining more widespread popularity. The breakdown of the deal signals Verizon may view Google as a competitor rather than a partner when it comes to Nexus One sales, which are probably at less than half a million since the phone’s January debut, said BGC Partners’s Colin Gillis.

“It’s really a flop for Google,” said the New York-based analyst, who advises investors to hold Google shares and doesn’t own any. “They paid a price to roll out their own branded phone — it’s a price of trust and relationship with some of the other players in the space.”

Carriers aren’t allowed to sell the phone in their stores, forcing customers to buy the device on Google’s Web site. AT&T Inc. didn’t endorse a version of the phone for its network technology, which is now being sold without a contract on the Google site.

Google decided against selling the Nexus One with Verizon because of “amazing innovation happening across the open Android ecosystem,” spokesman Anthony House said in an e-mailed statement.

Something tells me that the real story has more to do with profit margins than anything else, but if not margin, then perhaps the loss of partnership is the result of some other deal being a bit sweeter.

Stock Performance

Verizon Wireless, based in Basking Ridge, New Jersey, has no current plans to sell service for the Nexus One phone, Marquett Smith said. “If they want to do business with us or sell the device, we’re open to that.”

Verizon Communications Inc., which co-owns Verizon with Vodafone Group Plc, fell 13 cents to $28.92 at 11:08 a.m. in New York Stock Exchange composite trading. Google, based in Mountain View, California, dropped $7.27 to $537.72 on the Nasdaq Stock Market.

Verizon has broadened its smartphone line as it vies with rivals like AT&T and Sprint Nextel Corp. for a shrinking pool of new customers, with more than 9 phones for every 10 people in the U.S.

Carriers have turned to smartphones as more consumers seek devices that can function as pocket computers, surfing the Web and playing video. Smartphone sales probably will climb 46 percent this year, more than triple the pace of the overall handset market, according to Gartner Inc.

Android’s Significance

While Google’s Nexus One may not be a hit, the company’s Android operating system will help anchor the carrier in mobile, Gillis said. Google and its partners probably sold 6.8 million Android devices last year, accounting for 3.9 percent of worldwide smartphone sales, according to Gartner.

“Beyond any single phone, the real point is that Android itself as a platform is significant,” said Gillis. “We’re going to see it on more devices beyond phones, whether it’s netbooks or laptops.”

T-Mobile USA Inc. already carries the phone, while Sprint, the third-largest mobile carrier, has said it will debut the device as well. Vodafone said today it will sell the device to customers in the U.K. on April 30.

It’s possible that the Nexus will come later, after it debuts at the other carrier, if the market changes and Verizon finds they need another choice for the customer. The fact that Vodafone has already committed to the phone means that the chances are good for a Verizon pick up at some point – Verizon Wireless is half owned by Vodafone.




Quote of the day:
If people never did silly things, nothing intelligent would ever get done.

– Ludwig Wittgenstein

 

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