Google just changed the wireless game

At the Android press event this morning, Google turned the wireless industry on its head.  On the surface, it looked like Google only introduced a new (albeit very slick) phone, the NexusOne.  But below the surface, there’s a lot more going on.

The centerpiece of the event was the Nexus One phone.  Slightly thinner and lighter than the iPhone, the Nexus One boasts a 1GHz Snapdragon processor from Qualcomm (the fastest mobile phone processor on the market), a 5 megapixel camera with LED flash, dual microphones for noise cancellation, and my favorite bit of all, a 3.7 inch 480×800 OLED screen.  This phone is a powerhouse, and while some in the industry are looking at the current carrier exclusivity of T-mobile (currently the 4th place carrier in the US), it makes a lot more sense when one considers that they just upgraded their network to 7.2 Mbps 3G, twice the speed of AT&T’s current network.

But this barely scratches the surface. 

The biggest reveal was the decentralization Google is introducing to the wireless industry.  The Nexus One isn’t a T-mobile exclusive.  Consumers have the option of buying the phone unlocked (though for spectrum reasons 3G doesn’t work with AT&T).  In the Spring, a CDMA version will be coming to Verizon, and a version will be subsidized  by Vodafone in Europe.  And it’s not just the NexusOne that’s getting this treatment – more Android phones will be available from other manufacturers with Google acting as a merchant.

The significance here is going to be missed by most analysts and backseat commenters.  This is the definition of a paradigm shift.  Just as Apple broke industry norms with the iPhone and selling the device directly, Google is shaking things up by allowing wireless consumers to focus on the device while minimizing the network.  Google just handed over the most trafficked site in the world as a storefront to wireless handset manufacturers, and is tying in wireless network providers and their subsidies.  By creating a centralized storefront, they’ve decentralized the carrier influence on the marketplace.  Carriers are now going to have to increasingly compete on network quality, speeds, and pricing, not on who has the handset flavor of the month.

One more thing to consider with this announcement in mind: Google Voice integrates quite well with Android phones, providing a phone number that can be used for texting and calling and isn’t tied at all to a particular carrier.  The big winner in all of this is Google, even more than just their manufacturer partners.  Expect phones like the Motorola Droid or HTC Nexus One to be compared to the iPhone in the press every month or two.  The quality of these devices, supported by an ever improving open OS, is impressive.  At CES, we’re expecting two new Motorola Android handset debuts.  Over the coming year, there will be a constant barrage on iPhone’s mind-share.  Apple’s going to have to hit a home run with their next iPhone revision this year, or there’s a very good chance the inning is going to change.