Google's Nexus One smartphone has caused several executives at mobile carriers to wonder just how far the search and Web services giant will go.
In a recent discussion at an industry conference in Spain, Vodafone CEO Vittorio Colao said the industry should be wary of Google. He cited the fact that "80 percent of the advertising online goes down one funnel" as proof that wherever Google decides to compete, it attempts to dominate and leave just scraps for the competition.
Other carriers are concerned that Google might attempt to change the way the industry sells phones and, in the end, dictate the direction of the entire mobile industry-a luxury carriers have had since the beginning.
The only problem is, beating Google to the punch will be difficult. The company has captivated consumers with several well-respected Android-based devices. It has also used its position as one of the more trusted companies in the space to change the way consumers buy phones. All the while, it has generated significant advertising revenue originating from mobile phones connecting to the Web on carriers' networks. Those carriers are upset that they're being left out of the money-making process. And they want Google to address that.
But the chances of Google working to help mobile carriers are slim. In fact, carriers need to stop Google before it's too late. Here's why:
1. Android is gaining ground
When Google first entered the mobile market, most carriers weren't too worried. Android didn't take off nearly as quickly as Google had hoped. Vendors failed to quickly jump on board. And Apple's iPhone continued to dominate. But in recent months, all that has changed. Android phones are selling extremely well. Consumers are voting with their wallets and they want Android. That could cause some trouble for carriers.
2. Vendors are signing up
Following that, more vendors are signing up to offer Android-based phones after seeing how well they sell. More and more Android-based phones are hitting store shelves. The more Android phones that sit on a carrier's shelf, the more power Google wields. That's a problem for carriers.
3. Carriers are hated
There's little debating that Verizon Wireless, AT&T and the others are not very well liked in the mobile space. They charge ridiculous fees on plans, their early termination charges are unacceptable and in many cases coverage fails to live up to their promises. Carriers know that. They also understand that the more they upset consumers, the easier it will be for Google to capitalize. But rather than fix their own mistakes, it seems they would prefer to target Google. Interesting.
4. Google is well-respected
The world's view of Google is nothing like its view of carriers. Google is known as the company with the motto, "Don't be evil." Google offers outstanding Web search. Some of its online services are extremely easy to use. Most importantly, its Android-based phones work quite well. When given the option to trust carriers or Google, most consumers would likely choose the latter.