Rumors of a Google phone were around since at least December of 2006 that Google was in talks with UK phone carrier Orange about making a Google branded device. Probably earlier than that, since Google bought Android, Inc in 2005. What did a search engine want with an obscure mobile company back then?
Google and the FCC Auction
The IS Federal Communications Commission (FCC) announced auctioned off a large chunk of wireless spectrum. The spectrum was freed in 2009 when analog TV broadcasting ceased. Google made the surprise announcement that they would commit 4.6 billion dollars towards the auction, if the FCC agreed to stipulate that any auction winner must allow open standards for software, devices, networks, and services.
The FCC adopted two of the four suggestions and stipulated that auction winners must provide open standards for devices and software if the minimum bid was made. Rather than leaving the auction entirely, Google did bid in the auctions and made sure the reserve was met. In some cases, they even bid against themselves to drive up the price. Google did not win any spectrum. They didn't intend to. Instead, Verizon won the spectrum.
Android and the Open Handset Alliance
Rather than releasing a Google branded phone, Google released an operating system for mobile phones. The new system, released to developers in 2007, came as an open source project called Android. Along with Android, Google announced a band of 30 technology and mobile companies called the Open Handset Alliance.
Google's aim in releasing Android as open source and forming an alliance was to try to introduce an open standards in an industry that is notorious for having closed systems. This also let Google gain market share with the growing number of people who access the Web from mobile devices.
It was a bit of a mixed bag. While Android has gained considerable market share, it also fragmented Android as every single carrier added their own twists and tweaks to the interface.
Android Market and Google Play
Software for Android powered phones were delivered through the Android Market. Google gave developers an almost unrestricted ability to upload apps to the Android Market. This is a contrast to the iPhone App Store, which has controversially banned software it feels competes with existing Apple products. Later on, Google changed the Android Market to Google Play to fold it in with their music, movie, books, and other device sales.
Android Developer Challenges
In order to release Android with high quality applications already in place, Google held a contest called the Android Developer Challenge. The contest gave large cash prizes to developers for prize winning applications. Google has plans for more Android Developer Challenges. It was a smart move. While Android launched with fewer apps than Apple, it still made an Android phone a lot more worth owning than competing phones with fewer apps.
T-Mobile G1 With Google
The first Android phone for market was the T-Mobile G1 With Google. The new phone launched in the US under market underdog T-Mobile for $179 with a two year voice and data contract. It was the first and only time T-Mobile got an exclusive deal like that. Verizon came out with the Droid line as a counterpoint to the iPhone, and Sprint offered the first Android with 4G access. Once AT&T lost their exclusive iPhone deal, they started offering powerful Android super-phones as well.
The G1 featured:
- Touch screen, trackball and keyboard
- Applications from the Android Market
- Google Maps, YouTube, and Google Talk
- Music downloads from Amazon.com
- Built-in Wi-Fi, 3G, and EDGE
Pretty primitive by today's standards, and it really wasn't that much when compared to the iPhone, but it was a shot across the bow. However, it wasn't the Google phone.
The Google Phone
The G1 was nice, but the real Google phone line started with the Nexus One, which was made by HTC. It was, by all market measures, a flop. Google marketed the phone entirely on the Internet. It had incredible hardware for the price, but the price was still too high by American standards. In the US, buyers are used to buying a discounted phone and being locked into a two year contract. They weren't used to paying over $500 for a phone without a contract.
The second Google phone was the Nexus S by Samsung. It was sold as a more traditional phone and offered to Sprint initially, and even after it opened up to other carriers, it stayed as a traditionally marketed phone. The Nexus S had a front-facing camera, touch screen, and NFC sensors. It wasn't as innovative as the Nexus One, but it allowed Google to keep a "pure" Android phone on the market.
The Galaxy Nexus took a bit of a different tactic. It was made by Samsung and offered as an exclusive through Verizon in the US initially, and then Google started marketing the phone directly online through Google Play. The strategy had failed with the Nexus One, but the market had matured, the phone was priced less expensively, and Google was in the process of closing a deal to purchase Motorola Mobility. That deal closed in May of 2012. While Google says they'll continue offering Android as an open source product, we may see more phones, tablets, and other devices sold directly to customers through Google Play.