This fall, with the expected release of Android 5.0, Google might completely reinvent its Nexus smartphone program: Instead of partnering with a single handset manufacturer to launch a single flagship Nexus phone, Google could release as many as five Nexus-branded smartphones, each running a pure, unadulterated version of the company's next operating system.
This move, first reported by the Wall Street Journal last week, would be a bold reboot of Google's Nexus program. For the past three years, if consumers wanted to purchase a phone running the latest Android OS unsullied by carrier- or manufacturer-installed interface skins or bloatware, they looked directly to Nexus handsets.
The HTC Nexus One introduced Android 2.1 in January 2010. The Samsung Nexus S introduced Android 2.3 in December 2010. The Samsung Galaxy Nexus introduced Android 4.0 in November 2011. Each Nexus phone has held "flagship" status -- the first piece of hardware to run whatever new OS version Google's cooked up.
So why would Google want to expand its Nexus program, and drop its current one-phone, one-partner model? First, the move could help reduce "fragmentation" in the Android ecosystem -- the phenomenon of too many different Android phones running legacy OS versions, and never getting OS updates.
Second, the move could be a peace offering to all of Google's hardware partners. Google is about to buy Motorola's hardware business, Motorola Mobility, so it's interested in avoiding any displays of favoritism to its new acquisition.
Third, Google knows that consumers aren't always smitten with the skins and software additions imposed by its hardware and carrier partners. Unleashing a greater number of "pure" Android phones into the wilderness appeals to the hardcore Android faithful.
For its part, Google declined to comment on the Journal report or the future of the Nexus program. But that doesn't stop Gadget Lab from calling out the winners and losers that would emerge if this rumored program comes to pass. There are four major groups that would be affected by a "Let's Give a Nexus to Everyone" plan. Let's explore how each of them might experience the policy shift.
Google wins big if this plan comes to pass -- but it will have to get hardware partners on board.
The company is about to purchase Motorola Mobility for $12.5 billion. Regulators in the U.S. and European Union have been onboard with the plan for a while, and China's anti-trust regulators just gave their blessing this Saturday. China's blessing comes with a caveat: Google must must keep Android free and available to other handset manufacturers for at least five years.
The Chinese stipulation underlines the fears of all those hardware manufacturers not named Motorola. Samsung, Sony, LG and HTC all have a stake in Android, and might rightly fear that Motorola will receive most-favored-manufacturer status under Google ownership.
Enter the new Nexus program. By partnering with all the top handset makers to develop a Nexus flagship phone for each company -- complete with early access to the latest version of Android -- Google staves off a partner-relations nightmare. That's a win for Google.
Google also puts a hot, new flagship phone in every OEM stable. That's a win too.
In the past, it made sense to work with just a single partner on Nexus phones because the handsets born of those relationships could be uniquely trumpeted for their flagship status. Each flagship phone was a single, shinning example of what the latest version of Android was capable of -- killer hardware specs and never-before-seen software features grandly unveiled in a single package.
But now the single flagship model just doesn't wash.
"With Google buying Motorola, working with all of the leading hardware partners to develop a Nexus line of what's on the leading edge makes more sense," Charles Golvin, a mobile industry analyst at Forrester, told Wired. "If they get everyone involved in developing, nobody will be able to point and say Motorola is getting something they're not."
Golvin says something very interesting here: "getting everyone involved in developing." While Android is the world's most popular smartphone operating system -- running on more than 300 million phones since the platform's debut in 2008, with more than 850,000 new Android phones and tablets purchased each day, according to Google's Andy Rubin -- fragmentation remains a major problem.
Google's latest version of Android -- 4.0, aka Ice Cream Sandwich, or ICS -- is the first Android version designed to run on both phones and tablets. While ICS launched in November 2011 on the Samsung-built Galaxy Nexus, it's currently only running on about 5 percent of Android phones. That's fragmentation in a nutshell: A small percentage of new phones run the latest-greatest, while the rest of the ecosystem runs last year's oh-so-unfashionable OS.
So, by giving every manufacturer a good amount of time to develop around Android 5.0, which is rumored to be nicknamed Jelly Bean, each manufacturer could build greater institutional knowledge, and (theoretically) roll out OS updates much more quickly to non-flagship handsets. And, beyond that, simply launching a new OS in five phones (instead of one) immediately mitigates fragmentation a bit. The new program would also reinforce the consistency of the Android experience as Google designs it.
"Getting the major hardware makers to each offer at least one phone that's running pure Android -- that would be a win for Google," Jack Plunkett, the head of Plunkett Research, told Wired. "Right now, there is very little consistency in the user experience on Android because each company is making whatever they want. This would give Google more influence over design of the hardware and the software experience too."
Hardware Manufacturers
So far, the only hardware company that seems to be winning on Team Android is Samsung. The Nexus reboot could help change that.
With an army of Android phones sold around the world, Samsung has dethroned Nokia as the world's top manufacturer of smartphones, with 300 million Samsung handsets sent to retailers last year.
Meanwhile, other Android handset makers are struggling to turn a profit using the OS, which Google gives away for free. What's more, Android smartphone manufacturers have been penalized by patent lawsuits with Apple, suffering sales delays and even sales bans.
But now imagine a world where Google has its own hardware innovations business. It's called Motorola, and it's a house organ. Google could actually tap its in-house hardware expertise to benefit the entire Android ecosystem, heading off patent battles before they happen, and raining down better hardware-software synergy on all Android partners. This could provide a nice lift for all those hardware manufacturers not named Samsung.
Plunkett said that Google's Motorola leverage could be a deciding factor in whether Nexus partners come out winners or losers in the multiple Nexus phone strategy.
"This would be an opportunity for Google to say, 'Everything we innovate in this Motorola business we picked up will be shared with our Nexus partners,'" Plunkett told Wired. "Intel, Nvidia, TI, AMD -- they all make prototype devices, and they show them to the companies that buy their processors and say 'Look what you can do.' Google will need to do that with Motorola. Google will have to come up with the innovation here, because you don't want five of the same phones with different logos sitting on a store shelf."
Wireless Carriers
The story's been nothing but rosy up to this point, but the four major wireless carriers -- AT&T, Sprint, T-Mobile and Verizon -- could end up being the losers in a new Nexus world order.
Most carriers load a lot of crapware on Android phones. These apps are portals to bespoke content stores that boost carrier revenues, but junk up the Android experience as Google intended it to be. All this would go away (theoretically, at least) in each carrier's flagship Nexus offering.
In the current status quo, carrier stores even vie with Google's own Play storefront for consumer attention. Verizon VCast, T-Mobile TV and Samsung Media Hub are a few examples. Nexus Phones ban these "apps," though Google has allowed for carrier-branded customer service apps to be pre-installed on the Galaxy Nexus.
"Wireless carriers don't manufacture handsets, but they rely on them for their business," Plunkett said. "There is an intense collaboration between the wireless carrier and the handset makers in building devices that they can market as exclusive, and create some buzz around, and tout as better than the other guy's phones."
Sure, if Google and its hardware partners were to make different Nexus phones exclusive to different carriers, the telecoms might warm up to the new Nexus strategy. But it's unlikely that wireless carriers will support the news Nexus phones with the same degree of attention they heap on other big-name, carrier-exclusive handsets.
"Nexus phones don't allow carriers to influence the software the same way other Androids do, and Google seems to want to sell them unlocked, without a contract," Plunkett said. "That and a lack of exclusivity is why you've never seen a major marketing push for a Nexus phone from a carrier. If you look at the majority of marketing for phones nowadays, it's coming from carriers, not handset makers."
Carriers, of course, also want to keep consumers locked into two-year contracts. So any Google strategy that includes a multitude of unlocked phones gives the wireless companies the willies. Contracts provide reliable, monthly revenue streams. Contracts generate contract extensions. Most phone users aren't interested in buying unlocked phones, but even subtle shifts in the current contract-driven economy could be bad for Verizon, AT&T, Sprint and T-Mobile.
As we reported last week, the rumored plan involves Google selling all these flagship phones directly, unlocked and off-contract. This won't make carriers happy.
Consumers
A hardware ecosystem filled with more "pure" Android handsets is a big win for consumers. When manufacturers skin Android with their own custom OS wrappers, they slow down system performance while rarely making the OS any easier to use.
So, if Google's multi-pronged Nexus strategy comes to pass, a consumer looking for Android 5.0 purity could stick with his current carrier contract, and simply upgrade to whatever Nexus phone his carrier supports. Alternately, that consumer could buy one of five different unlocked phones directly from Google.
Choices would abound, and that makes consumers (and Gadget Lab) happy. Ever since Google started its flagship phone strategy, Nexus phones have been some of the best smartphones on the market. Unfortunately for Google, though, Nexus handsets haven't always been sales winners.
In the first quarter of 2010, Google sold the HTC-built Nexus One on its own, online and unlocked. But at a price of $530, it was a sales flop. By July 2010, Google gave up on the idea of selling phones itself, through its own online store.
Indeed, the Samsung Nexus S, which launched December 2010, was sold directly through Sprint. Next up was the Galaxy Nexus, which debuted on Verizon last year, and just hit Sprint last month. It looked like Google had committed to carrier-only distribution, but in a curious move this April, the company began selling an unlocked version of the Samsung Galaxy Nexus for $400 through its Google Play online store.
"The market proved Google wrong at that point," Forrester's Golvin said of the Nexus One's failed sales strategy. "Consumers in the U.S. are used to subsidies on phones. They're not used to paying $600 for an iPhone, or $500 for a Galaxy S III. They want to walk into a store and pay $100 or $200 for a new phone, and they want it to be a high-end phone. But there are a limited number of consumers who are willing to spend the extra money for an unlocked phone."
But now it looks like Google has landed on an effective compromise, selling the latest Nexus both locked and unlocked, letting consumers decide for themselves where they want to pay their charges. Unlocked phones cost more, but liberate users from a lifetime with the same carrier. Locked phones are subsidized and therefore cost less, but consumers have to commit to carrier loyalty.
If anything, the compromise approach shows just how Google is adapting to what consumers, hardware partners and carriers want. Providing options is a win for consumers: Choose your phone, choose your carrier, and choose your pricing model, all while keeping a pure Android experience intact.
We like the sound of that and we think Android users will too.
