Google Could Sell Nexus One via SAAS Model

News Analysis: Google could sell the Nexus One smartphone unlocked and unsubsidized over the Internet. A users would log onto a Google Account and pick a carrier, either Verizon Wireless, AT&T, Sprint or T-Mobile in the United States, claims Silicon Alley Insider's Dan Frommer. Ovum analyst Jonathan Yarmis says this scenario is unlikely because people won't shell out $500 for the mobile device, but allows that Google could subsidize its smartphone through advertising.

There's been a lot of debate about how Google plans to sell its forthcoming Nexus One smartphone, a thin, speedy device based on the Android 2.1 operating system.

The most intriguing scenario is one in which Google sells the device unsubsidized online and unlocked, letting users pick their wireless provider.

Because we're fond of catch phrases that explain things with brevity, eWEEK calls this Google's new SAAS model. Google's original SAAS model is, of course, software as a service, the cloud computing model that enables the company to host applications and provision them to users over the Web. So call this the new SAAS model, "smartphone as a service."

This model has been laid out by Silicon Alley Insider's Dan Frommer, who suggested in a Dec. 14 post that Google wants to turn the mobile carrier and phone distribution market on its ear. Rather than having users go to Verizon Wireless, AT&T, Sprint or T-Mobile to pick out a device and sign up for wireless service and data plans, Google's new model could work in the following fashion.

Users go to and search for devices, such as the Nexus One, which Google employees are testing and some bloggers have been lucky enough to sample. They order the phones unsubsidized and Google ships them.

A user then powers on the device and picks a carrier, which for the Nexus One would seem to be T-Mobile at this point because it's a GSM device. AT&T does GSM too, but the company seems to be cold-shouldering Android. Strangely, Frommer suggested that there could be a bidding process, in which carriers would compete for users based on whether they want data only, data and voice, unlimited calling, and the like.

He also suggested that Google could even buy access to voice and data networks and act as the carrier. Users would get pay-as-you-go service, or have their accounts credited by signing a long-term contract. Other options Frommer speculated about:

""Maybe Verizon would give you a $200 service credit for a 2-year contract, or credit your Visa card. Or maybe carriers could compete here over "signing bonuses." Google may offer you an extra credit to make Google your default search tool. You could also pick your number through this sign-up process, and even select to make Google Voice your primary voice technique. Google's installer would configure your phone automatically.""