T-Mobile and Google (and HTC) Launch G1, Industry’s First Android Phone

| Sep 24, 2008 | Mobile Devices | Competitive Intelligence Report

| Analyst: Avi Greengart

Current Perspective: Positive
Vendor Importance: Very High
Market Impact: Very High

Event Summary

September 23, 2008 – T-Mobile announced the international launch of the world’s first Android-powered mobile phone in partnership with Google. The T-Mobile G1 is manufactured by HTC and combines full touchscreen functionality and a QWERTY keyboard with a mobile Web experience that includes Google Maps Street View, Gmail, YouTube and others. The G1 goes on sale in the U.S. on October 22 for $179 with a two year contract for voice and data.

Analytical Summary

• Current Perspective: Positive on the T-Mobile G1, because T-Mobile USA desperately needs a consumer-oriented touchscreen smartphone to retain subscribers who might otherwise be tempted to go to the Apple iPhone at AT&T, Samsung Instinct at Sprint, LG Dare or the upcoming RIM Storm at Verizon Wireless, or any of a half dozen other similar products. T-Mobile USA is rolling out its 3G network and needs data-centric devices to sell data plans. T-Mobile has priced both the G1 and its service plans to be competitive. It is responsive with a well designed (if somewhat utilitarian) user interface and nicely integrated Web browsing, search and mapping functionality. The G1 is also the coming out party for Google’s Android. Google’s brand strength – and a few standout features like mapping – are drawing a lot of attention, but the promise of the platform has yet to be realized by application vendors. Finally, the G1 is HTC’s first foray outside of Windows Mobile, and helps the company reduce its reliance on Microsoft, whose mobile OS desperately needs an overhaul to compete in the new consumer smartphone space. However, HTC doesn’t get nearly enough attention with the G1 (the product is called the “T-Mobile G1,” not the “HTC G1” and HTC’s logo is in tiny letters on the side).

• Vendor Importance: Very high to everyone involved, as HTC is branching out beyond Windows Mobile, Google is launching a mobile OS, and T-Mobile needs an exciting “iPhone-like” phone both to keep its subscribers happy and to monetize the 3G network it is now rolling out in markets around the U.S.

• Market Impact: Very high, because Android is a new mobile OS and marks Google’s deepest push yet into mobile devices. But the G1 today is a Web-browsing, POP3 email, touch-screen device at a good price with well-priced data for T-Mobile – which is rather ordinary, not revolutionary. To try to bring the revolutionary aspect to it, the spokespeople said the words 'open' and 'platform' at dozens of times (I stopped counting after a while) and hyped the Google brand. Consumers buy products, not operating systems. Thankfully, the G1 appears to be an excellent product for T-Mobile. But for now, this new “open platform” is mostly a promise, and a promise to developers, not consumers. Should developers take advantage of this freedom and flexibility to create extraordinary mobile applications, then the platform itself will be revolutionary.

Recommended Competitor Actions

• RIM has been advertising the BlackBerry for all the things you can do with it that aren’t corporate email – understandable as it stretches its brand. But when competing against the G1, it must go back to its roots and remind people that BlackBerries offer secure push corporate email, and the G1 does not. When speaking to IT managers it can add that Android is a new OS, and a new OS means new security threats.

• Apple’s big challenge from Android is not the OS’s capabilities but the business model: Apple prefers more control over the end user experience, and Google is promising unfettered innovation. The problem isn’t just that Apple is rejecting applications for the App Store, but that developers aren’t sure why the applications are getting rejected. Some seem to be rejected so that they don’t compete with Apple’s own efforts, but Apple does not have a monopoly on good ideas, so this could be a shortsighted strategy.

• Apple also needs to let applications run in the background or get its promised messaging server up already.

• Microsoft’s Windows Mobile is a solid OS with lots of support from hardware vendors and software providers. But it’s boring, and the market momentum is going to consumer-oriented devices. Microsoft needs to give Windows Mobile a grounds-up user interface overhaul, and quickly. Relying on its hardware partners to re-skin the OS results in multiple half-baked implementations instead of a single unifying approach.

• Any Symbian S60 application written today can be sold to an installed base of at least 80 million devices, and will be binary compatible with future Symbian Foundation OS efforts in the future. Symbian Foundation needs to do a much better job explaining its advantages and roadmap, and Nokia must build a better distribution model than today’s Download.

• HTC’s device competitors ought to be able to come up several form factors that combine touchscreens and QWERTY keyboards that don’t involve hand stretch exercises in order to type (and are more attractive than the G1, as well). However, competing based on hardware alone – as Samsung has been doing – is not a recipe for long term success, and LG needs to find a way into the smartphone market in the first place.

Recommended End User / Customer Actions

• Consumers living in T-Mobile 3G coverage areas looking for a strong mobile Web browsing phone have a new device to add to their shopping list: the G1.

• However, those who need corporate email support will want to look elsewhere, or wait until someone builds such support for Android.

• Consumers who prioritize simplicity over efficiency, and who want entertainment over, well, promises of “openness” should still consider the Apple iPhone 3G at AT&T.

• European consumers wedded to the Nokia brand and the S60 user interface have a wide range of phones to choose from: everything from map-centric phones to high end imaging devices. Nokia has promised to deliver its own touchscreen phone by the end of the year, so those who love Nokia but are tired of 12 button bars and sliders should probably wait to see what those look like.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

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