They Should Make It: Cheap Smartphones, Free Service

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Hear me out, hear me out. I’m not just calling for cheap smartphones and free service because I’m cheap (I am cheap). Rather, I think a company like, oh, let’s use Google as an example, could provide a viable alternative to expensive phones and even more expensive cell phone plans.

Google makes money by selling targeted advertising, plain and simple. The company has other revenue streams but the sales of targeted ads make up the bulk of its profits every year. As such, Google has a vested interest in getting its software products—namely its search engine and stuff like Gmail, Google Docs, and the like—in front of as many people as possible. More people means more eyeballs means more ads it can sell. And so far, the plan has worked. Google has a lot of money.

So now there’s Android, a Google-backed initiative to get a Google-centric mobile operating system in front of as many people as possible. So far, the plan is working. But there’s another step that Google could take: build its own network. Do you think Google likes to have to cow-tow to the mobile operators like Sprint, Verizon, AT&T and T-Mobile in order to get its Android handsets in front of consumers? Aside from providing voice and data streams to these devices, the providers add very little value to Google’s plan. They are so-called “dumb pipes” as much as they’d like us to believe otherwise.

Here’s what Google should do—or should have done with the Nexus One, a phone it developed based on its own desired feature-set. Build three tiers of Android phones and give them away for next to nothing. I’m talking, like, $100 for something like the Nexus One, $60 for something a little less capable, and maybe $30 for a lower-end phone. No two-year contract, no subsidies. The idea is to get as many consumers to buy them as possible. Make them expensive enough that people don’t take them for granted but cheap enough that just about everyone can afford one.

Then, instead of leaving consumers with no option but to sign up for a $70+ per month voice and data plan with one of the four big carriers, Google should leverage the power of Wi-Fi, VOIP, and mesh networking. Wi-Fi is already all over the place in most densely populated urban centers, Google’s got a killer VOIP product in Google Voice, and by making each Android handset mesh networking-capable, it wouldn’t need cell networks.

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