Several blogs have been reporting my speculation on Nexus One pricing as a rumor. Which is okay, but I am only freely thinking what to expect Google will do about the pricing. What I think Google should do. I don't have secret infos from Google insiders, at least not yet. Although I am sure Google insiders are monitoring what the blogosphere is talking about so if they see a lot of people getting excited about disruptive pricing and VOIP features, then it could well encourage them to actually really make the big announcements and make it happen at the launch.
My speculation is based on following:
1. Manufacture and Bill of Material of a 3.7" AMOLED touch screen smartphone has been calculated by isupply and others to cost below $150 all inclusive when mass manufactured. Although an AMOLED WVGA screen is probably a bit more expensive than a 3.5" 480x320 LCD screen. Manufacturers and resellers make very high profit margins when they sell unlocked smartphones at $400-500, and I think, those prices are only a deterrent to unlocked phones and to push consumers into signing $2500 2-year contracts for getting those phones.
2. My speculation is that when Google will be selling its own phone (even manufactured by HTC or other Smartphone manufacturers in Asia), my speculation is that Google does not need to profit on the hardware, but plans to profit over time on mobile ads and services.
3. Google does not own spectrum, yet my basic suggestion is that Google may be able to approach telecom carriers internationally and offer to buy Petabytes of bandwidth on 3G networks, at a given rate per GB, and my speculation is that 3G bandwidth data should definitely cost less than $10 or 5€ per GB. If Google is able to purchase 1 Petabyte of 3G data from a telecom carrier for $10 per GB, guaranteed best effort bandwidth not throttled for VOIP, then what would stop Google from offering 100MB free bandwidth per month to users of unlocked Android phones, to use for basically as much VOIP over 3G using Google Voice, Gmail, basic Gmaps and basic Web browsing as most users would need. Thus get an unlocked Android phone with a Google SIM card and get unlimited free VOIP and 100mb/month data for free on ad-supported Google services or purchase more data for a certain price for example $10 per GB to use whenever you want, not needed to be renewed each month. I am probably far over-estimating the cost of 3G data bandwidth, the price per GB is probably below 1€ per GB, unless telecom carriers just refuse the deal and that they wouldn't accept to sell any 3G cellular bandwidth to Google.
I have been campaigning for free VOIP on WiFi and 3G for years, since I have been very active fanboy of all Archos Internet Tablets since the Archos PMA400 released in 2004 on my other site http://archosfans.com, where my hope has always been to some day have better telecom system that doesn't try to sell you a $2500 2-year contract with a $150 smartphone. But instead move towards improving the smart device, implement better optimized software through Linux (Android enables that for the first time), larger higher resolution screens (4.8" 800x480 like Archos 5 Internet Tablet is my favorite size and resolution), and also some day, make it possible for people to just buy the bandwidth that they need and not charge unreasonable prices anymore for voice and sms services.
Here are some of the sites that have been posting my speculation over the past couple of days:
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EDIT: Google has not confirmed any pricing for the Google Phone Nexus One. You can read my latest post backing up my speculations on what I expect Google will price it, what I think Google should price it: http://armdevices.net/2009/12/16/the-blogosphere-reports-my-nexus-one-pricing-speculation-as-fact/
As I have been posting in comments on mediamemo.allthingsd.com, gizmodo.com and androidguys.com, I enjoy speculating about features and prices of phones and business models. So let me post here the prices that I expect this first Google Phone to be sold at and some of what I expect of its hardware specifications:
- $200 sold through all retailers, Best Buy, Amazon, Wal Mart and any others. Unlocked, for use on any network, but I think it may come with a so-called Google SIM card (read further below)
- Google may provide a subsidy up to $100 for long-time and very active Google users. So if you buy it online using your Google Account, they may provide you with an instant rebate. If you buy it for $200 in retail stores, Google can still provide you the online $100 rebate to use on the Google Android Marketplace, on Google Checkout stores or even on extra data for your Google SIM card (read futher below).
- My speculation is that Google may provide up to 100mb of free data usage per month to all Android users with a Google SIM card (read futher below). The 100mb per month would be enough for as much Google Voice, Gmail, Gtalk, and basic web browsing that most people need (disabling bandwidth intensive things such as images can easily be setup). No contracts needed for those 100mb per month, but those may only work for use on Google services, for low bandwidth Android apps or for basic web browsing. In any ways, there would be a bandwidth usage counter clearly displayed at the top of the Android user interface next to the battery meter. The free 100mb per month may be throttled and may sometimes be limited to GPRS type of speeds.
- Extra bandwidth could be purchased in one click, such as I expect 1GB for $10 or 5€ is possible. That extra GB of bandwidth would be usable at any point in time and not need to be renewed every month.
- A monthly $30 or 20€ bandwidth package would provide up to 5GB in the USA or 10GB in Europe per month of unrestricted and full speed 3G bandwidth usage.
- Thus the overall Bill Of Material and Manufacturing costs for a Google Nexus One is probably below $150, so Google can very likely sell it below $200 with 8GB built-in storage and with MicroSD for storage expansion. Google doesn't look for making profits on hardware, they will make their profits on ads over the several months or several years that the hardware is being used.
The Google SIM card speculation:
- All those bandwidth speculations would work using the Google SIM card on any unlocked Android phone. Though since the Nexus One would be unlocked, any other SIM card could be used as well. And thus, competitors or telecom carriers themselves can provide SIM cards with pre-paid, with or without subscriptions for other packages of data usage. I think Google would allow Microsoft and others to take part in financing those free 100mb per month so users would be able to use competing online services and VOIP providers for free as well.
The calculation and speculation for a worldwide Google SIM card bandwidth service should thus be based on trying to not only guess if carriers will allow Google to turn them into dumb pipes of bandwidth, on the other hand, we should try to guess what price Google may pay to buy 3G data bandwidth in bulk from the carriers and thus at what price Google may sell it back to Android users without the need of monthly data subscriptions. My guess is that $10 per GB in the USA and 5€ per GB in Europe should be more than enough payment for the 3G data bandwidth. And that most likely Google should be able to purchase that for much lower prices if Google negociates deals for several Petabytes of 3G data bandwidth with the carriers. Thus giving away 100MB of bandwidth per unlocked Android user per month, would most likely cost a lot less than $1 per month to Google, thus that would be something Google should be able to give to unlocked Android users for free. But even if carriers would charge Google as much as $10 per GB for 3G data bandwidth, I believe that my speculation on the Google SIM card could still make a lot of sense.
Because Google would negociate for 3G data bandwidth with all carriers in every country. I believe that it should be possible for users to seamlessly and freely roam for data usage in other countries. That is, as long as they do use a Google SIM card for unlocked Android phones.
Source for picture: http://www.engadget.com/
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This may be a picture of the Google Phone:
From rumors on Techcrunch, this may be a pre-paid only $100 device, for WiFi and pre-paid 3G Voice over IP usage such as on Google Voice. Exactly the revolutionary business model that I have been talking about for a while. My guess on the Google Phone price, or what I think it should cost is following:
$100 for the 3.7" high density WVGA Google Phone Nexus One
$150 for the 4.8" medium density Google Tablet Nexus XL
All should come based on ARM Cortex A8 processors, probably OLED capacitative on Nexus One and LCD resistive on the Nexus XL. My suggestion is basically that the Nexus XL may be similar to my favorite consumer electronics device the Archos 5 Internet Tablet which I talk about in countless videos: http://armdevices.net/?s=archos and on my other site: http://archosfans.com
The most important factor here would be if the rumors are true and if my guessing is right, that the Google Phone and Tablet will be the first pre-paid Android phone and tablet. Affordable, my guessing also may even make it so that Google may not only sell it through all retailers like Amazon, Best Buy, Wal Mart, Media Markt, Aldi and such, but that one may even be able to buy it on google's own website and based on how active one has been on Google over the past few years, Google may even subsidize the purchase price of the phone or tablet. That is, cause Google can know it will more likely make more money on mobile ads from users who use Google services a lot. This way, look forward to Google Phone at $50, Google Tablet for $100 and even the Google Laptop/Tablet/E-reader at $150.
Some times, I think that it does take a big giant technology company like Google to really invest not only in the platform, not only in software, but also dedicate teams of hardware engineers into actually releasing own branded hardware on the market and push the boundaries in terms of business models to apply to the distribution of such technology. To push things forward faster, Google needs to make hardware.
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