Verizon Wireless and Google today unveiled details describing a joint effort in which the two tech titans will co-develop, market and sell devices based on Google’s open source mobile platform Android.
The deal essentially helps Verizon wean itself off reliance on Research In Motion’s (NASDAQ: RIMM) BlackBerry devices, thus strengthening its position in the competitive smartphone sector, while Google (NASDAQ: GOOG) gains the marketing muscle of the nation’s largest wireless carrier in its effort to push Android into the mainstream.
Verizon and Google plan to co-develop several Android-based devices that will be pre-loaded with applications from both parties as well as from third-party developers. A family of Android phones built for the Verizon Wireless network will come from “leading handset manufacturers,” according to a statement issued by the two companies.
Integral to the newly minted agreement is a commitment by the companies to devote “substantial resources to accelerate delivery of leading-edge innovation that will put unique applications in the hands of consumers quickly,” said Lowell McAdam, CEO of Verizon Wireless, during a conference call with analysts and media.
The agreement will come to fruition within the next few weeks as Verizon Wireless introduces Android-based handsets.
“We don’t want to leave the impression that you’ll be waiting until next year to see the fruits of this. In fact, over the next several weeks we’ll begin to announce some news, so stay tuned for some game-changing products in the next few weeks,” said McAdam.
Under the strategic alliance, the two industry leaders will create, market and distribute products and services, with Verizon Wireless also contributing by using its nationwide distribution channels.
Consumers will be able to purchase products resulting from the collaboration in Verizon Wireless retail and online stores.
Google’s chief lauded Verizon’s approach to nurturing a healthy mobile ecosystem.
“We had known of Verizon’s reach, scalability and performance, but we didn’t know they would be taking a leadership in openness, which is surprising given the nature of telecoms, so once we saw that Verizon Wireless is embracing an open philisophy, and they understand scale, it’s consistent with how Google works,” Eric Schmidt, CEO Google, said during the Webcast. “Through this partnership, we hope to deliver greater innovation in the mobile space to consumers across the U.S.”
To back up this premise, McAdam said that Verizon Wireless will support Google Voice, the VoIP mobile app that sparked controversy — and a federal investigation — when Apple failed to allow it in its App Store, citing what it says are overlaps with the iPhone’s core functionality.
“Yes, we will support Google Voice, either you’re an open (system) or you’re not,” said McAdam, “so we expect to bring that app to market.”
The news of the strategic alliance comes as Verizon gears up to launch its first Android-powered smartphones to keep pace with the competition.
Verizon with 87.7 million subscribers is the country’s largest cellular network, but No. 2 AT&T, with 79.6 million, is the sole carrier for the wildly popular Apple (NASDAQ: AAPL) iPhone.
Meanwhile Sprint, No. 3 with 48.8 million customers, is making a comeback in the sector with its competitive pricing plans and deal with Palm (NASDAQ: PALM) to carry its webOS Pre and Pixi. It also scored somewhat of a coup by inking the deal to sell the impressive HTC Hero, which analysts have said is one of the first handsets to truly deliver on the promise of Android in terms of style, user interface and features. It also recently revamped its developer site to include support for Android.
T-Mobile, though last in the pecking order with 33.5 million subscribers, is earning a reputation for being in the forefront of the Android movement, as it was the first carrier to launch a smartphone running the OS, the G1 last year. Currently, it’s slated to offer the Cliq by Motorola and already rolled out the HTC myTouch.
While Verizon has done well with its sales of BlackBerry models from Research In Motion (NASDAQ: RIMM), analysts had said the carrier would be better positioned in the market if it were to scoop up a deal for a signature phone.
The deal helps both parties, but isn’t necessarily going to shake up the mobile sector, said Avi Greengart, research director of consumer devices and analyst at Current Analysis.
“Verizon Wireless needs Android both to fight Apple over at AT&T and to avoid an over-reliance on RIM. Google needs better distribution for Android, which until recently was available at just a single carrier in the U.S. With this agreement, it’s up to three out of the four national carriers — everyone but AT&T,” Greengart told InternetNews.com.
“Beyond the obvious — that Verizon Wireless will be launching Android phones very soon — there isn’t much substance to the announcement. They’re working together, they’re building apps and platforms, and the word ‘exclusive’ never appears in the carefully crafted press release. In fact, both companies pledge to work together in an open fashion, which is consistent with Verizon Wireless’ recent rhetoric and a break from its walled gardens of years past.”
The news also comes on the heels of an update to the Android OS, to 1.6, dubbed Donut, which supports CDMA, the infrastructure used by Verizon, as includes as a host of other features.