What Google's Nexus One means for carriers

Now that we've seen the dust settle around Google's entry into the mobile phone business, what are the real takeaways and impacts of the move – particularly for traditional mobile operators?

Four key points seem worth noting:

1. Decoupling phones and carriers
It was somewhat surprising how straightforward the hardware, software, content and pricing mix actually was on the Nexus One. In the end, the most radical thing about its launch may have been the google.com/phone URL for its new online store. While Google did not drastically decouple the device from the service plans that drive it – for instance, by offering an advertising-subsidized version to deliver VoIP-only voice service, as was rumored at one point – it did make a first move toward providing consumers a new path to purchase their phones (with the operator as an after-, rather than fore-, thought). All of that said, initial sales of Nexus One via Google's online sales channel have disappointed, reaching just 20,000 units sold in the first week. So maybe carrier sales channels aren't so antiquated after all.

2.  The "Find-Stuff-Phone"
If Apple's iPhone is an app phone, then Google's device – indeed all Android phones – are at their roots "find-stuff phones."They are built from the ground up for searching the Web, navigating maps and directions, finding local businesses – all search-driven functions that Google has taken great pains to (a) own and (b) be able to offer for free while monetizing with advertising. In short, it's amazing to see just how directly Android and the Nexus One enables Google to move its Web-based ad business into the potentially lucrative worlds of mobile and local search.  If it can successfully shift how money gets made and exchanged in the mobile world as it did in the Web, look for business models to get disrupted just as severely and incumbents to fall just as hard.

3.  Monetizing Voice  
One of the more interesting questions with all things Google and telecom is what exactly happens to voice. Technologically, with or without Google, voice service becomes just another data object on tomorrow's IP-driven wireless architectures like LTE. One of the "killer apps"on Android phones is Google Voice, which moves such voice features as voice mail and SMS out of the carrier's domain and into Google's. In 2010, look for Google to start terminating Google Voice-initiated calls on its own VoIP infrastructure. As for subsidizing voice with ads, another expected Google gambit, it's already starting – Google recently started allowing its AdWords advertisers to put their phone numbers to their ads, essentially inventing a new ad-supported pay-per-call business overnight. That represents yet another unique way in which Google can begin to monetize the voice traffic it is now helping to enable on phones driven from its search listings, Android OS platform and related applications on its new Nexus One device. More recently, Google started delivering localized results from the main search query box in Android, yet another way its search-plus-mobile business is greater than the sum of its parts.

4. Customer Service Quagmire
This one feels like an I-told-you-so. Google has had massive problems supporting early customers of the Nexus One, so much so it quickly began offering a $100 rebate to acquiesce early terminators. Google's approach to customer service on its phone sales relies on user support forums, FAQs and emails for most inquiries – approaches it's borrowed from its products like search and Gmail. But those products are free; the Nexus One starts at a couple of hundred bucks plus monthly fees. With those prices comes an expectation of hand-holding – especially when the product doesn't work as expected. Mobile operators are certainly better equipped to manage customer support issues not only via call centers but retail locations. Apple, to its credit, has done a good job supporting the iPhone, via AT&T stores, yes, but also via an even better experience at its Apple Store retail locations. Google may be able to run its cash cow search service by algorithm and self-service interfaces. Customers buying hardware and service contracts need more hand-holding.