Did Verizon Wireless CEO Lowell McAdam misspeak?
Just last week, Verizon Wireless made its surprising open access announcement that will let third party devices on its network by the end of next year. Now, according to one published report, Verizon will also support Google’s Android open software development platform for mobile devices.
“We’re planning on using Android,” Verizon Wireless CEO Lowell McAdam told BusinessWeek. “Android is an enabler of what we do.”
If that sounds like there will be Verizon Wireless phones with Android software, that’s not quite the official company line. “Verizon Wireless has not yet decided whether we will use Android in any of the devices we ourselves offer,” Verizon Wireless spokesperson Nancy Stark said in an e-mail to InternetNews.com. “We certainly expect some in the development community to embrace the Android platform in the open access devices and applications that they develop.”
As for McAdam’s quote, Stark said it was in the context of “Android as an enabler of what we are doing with our whole Open Access initiative – i.e. it introduces another mobile platform for developers to work with … in developing handsets and applications.”
Announced last month, Android is the software platform the Google-led Open Handset Alliance is promoting for the development of mobile applications. Telecom and phone-related companies pledging support for OHA include Qualcomm, T-Mobile, Sprint Nextel, Motorola and Taiwan’s HTC. New phones using the software aren’t expected out till the second half of 2008; a software development kit for Android was released November 12.
Android, which Google acquired in 2005, includes an integrated software stack consisting of an operating system, middleware, user interface and applications. The OHA said at the announcement that Android will be made available “under one of the most progressive, developer-friendly open source licenses, which gives mobile operators and device manufacturers significant freedom and flexibility to design products.”
Analysts said whether Verizon Wireless (a joint venture of Verizon Communications and Vodafone) supports Android directly in its own devices or not, the bigger issue is the seismic shift in the industry around openness.
“It does look like the ice floes are breaking up, the locked-in, sub-optimal device we had as standard is opening up,” said analyst Roger Kay, president of Endpoint Technologies Associates. Kay thinks Google’s move to launch the Open Handset Alliance and bid on the government’s auction of 700 MHz spectrum to create a more open wireless network, has pushed the carriers to respond.
“Individual companies are always motivated to create a walled garden to extract monopoly rent, but buyers want as much choice as they can,” said Kay. “If you left it up to the carriers, they’d keep separate walled gardens forever. But now that change seems inevitable, I think companies like Verizon Wireless see a value in leading the open charge and getting some brand association value out of that.”
Gerry Purdy, chief analyst for mobile & wireless at Frost & Sullivan, said OHA promises to bring more devices to the Verizon Wireless network whether the phone giant includes the software in any of its own devices. It’s all part of the changing economics of the phone business. “Companies are wising up to the benefits of recurring revenue ad revenue as Google has shown, versus trying to own everything,” Purdy told InternetNews.com.
Purdy said Apple’s iPhone revenue-sharing deal with AT&T started a kind of ecosystem realignment that is still playing out. “You have the potential, for example, of location-based services for 3 billion devices. I think what Verizon Wireless did is look at whether it wanted to continue trying to squeeze out six or seven percent in subscriber growth every year or look at a paradigm shift that has the potential to grow it’s share 20 to 30 percent.” And unlike AT&T’s deal with Apple, Purdy noted that Verizon Wireless won’t have to pay to get these new devices on its open network.
But just how easy it will be to get on the Verizon Wireless’s network remains to be seen. The company said it would publish the technical standards the development community will need to design products to interface with the Verizon Wireless network early next year. Devices designed to meet those standards will be able to plug into the the network nationwide by the end of 2008.
According to a company statement, any device that meets the minimum technical standard will be activated on the network. Devices will be tested and approved in a $20 million state-of-the-art testing lab which received an additional investment this year to gear up for the anticipated new demand. Any application the customer chooses will be allowed on these devices, said Verizon Wireless.