Google’s Take Two On Mobile Handset Retailing With Nexus 2

Google is rumored to be rolling out a “Nexus 2” — or if it were a movie sequel “N2” — on November 8 with Samsung. Google’s Nexus One (built by HTC) was a failed experiment in direct selling to the public rather than through carriers. Despite public statements to the contrary, the move angered carriers and, together with the fact that people weren’t buying them online, eventually caused Google to shutter the project and change strategy.

That new strategy, at least in the UK, involves an exclusive deal with retailer Carphone Warehouse. According to reports Carphone Warehouse will be the only retailer in the UK selling the N2, which will be the first device running “Gingerbread” (Android 2.3). It’s another Google effort to sell directly to the public (and it’s a statement about the importance of offline stores vs. e-commerce too).

It’s not clear what the US rollout for N2 will look like. Given the carrier-centric nature of the US market it’s likely that the Google-branded handset will launch with a carrier or carriers plural — probably Verizon and maybe others. But I’ve seen nothing on that.

Meanwhile Apple is doing something potentially event bolder according to GigaOM: working with a SIM-card maker in Europe to integrate the card directly into the iPhone. The move, if true, would allow consumers to buy online or directly from Apple stores and then choose a carrier and activate with minimal carrier involvement. The different structure of Europe’s mobile markets permits this approach and would relegate carriers to bandwidth providers, fully subordinating them to the device and Apple.

Apple could develop a dual CDMA-SIM phone for the US that might permit the same strategy once AT&T exclusivity is gone. (Verizon and Sprint are CDMA, AT&T and T-Mobile are GSM.) But there are more technical challenges in the US as I understand it because of the parallel systems.

Even though Google wants the option to sell directly to the public and circumvent carriers it will continue to work with carriers as the “anti-iPhone” that allows them to compete with Apple’s device and gives them control they wouldn’t get from Apple. The entry of a viable Windows Phone would potentially complicate that role for Google. But the viability of the new Microsoft mobile device hasn’t been proven yet.

About The Author

Greg Sterling

Greg Sterling is a Contributing Editor at Search Engine Land. He writes about the connections between digital and offline commerce. He previously held leadership roles at LSA, The Kelsey Group and TechTV. Follow him Twitter or find him on LinkedIn.