Vodafone becomes bit pipe: Locked out of retailing Nexus One!

Well then, I was waiting for confirmation about this. It’s shocking.

SHOCKIN’, I tell you!

@allaboutiphone sent me a tweet of 3g.co.uk’s coverage of this recent Nexus One story.

A few days ago I speculated that Google’s move to sell phones (“The new way to purchase a consumer phone: Google.com/phone“) could well herald a new paradigm in the marketplace. I pointed out that the actual specification of the Nexus One wasn’t really that interesting (yes, it’s powerful, yes it’s got some cool apps) but the real meat was in their strategy of breaking the operator stranglehold on the mobile industry.

Vodafone are listed on the Google.com/phone site as the European preferred operator. If you want the Nexus One on finance (i.e. subsidised), you need to get your service from Vodafone. Of course you can buy the device at full price and use whatever operator you wish. I wanted to know if Vodafone would get the rights to retail the Nexus One themselves?

No.

No, no and thrice no. Vodafone will, according to the 3g.co.uk piece, have to point customers to the Google.com/phone website to obtain their phone (and contract, if they opt to have the device subsidised).

In one stroke, Google has thus converted the mobile operator into a bit pipe, into an incidental ‘supplier’. No problem in the first instance. They’re only offering one handset and demand will be limited, in the first instance, to die hard geeks. Normobs will still obviously go to the local operator shop for service.

But what happens when Google moves to add 5 more ultra desirable phones? What happens when that range extends to 50? How will the operators react when the manufacturers, freed from the constraints of having to serve their operator overlords (“NO WiFi in that phone”, “Switch off VOIP capabilities”), can start to truly innovate and respond to market demand quickly. Right now manufacturers spend most of their time trotting round their operator customers selling them their upcoming range and making concessions as necessary — only to have to contend with the operator strategies that are sometimes totally ridiculous (See Vodafone 360). Imagine how the manufacturers will react to a Google.com/phone portal that is retailing 50,000 devices a week to a rabid audience of consumers finally getting the devices and services they want?

I understand there’s a lot of rose-tinted future gazing going on here — and many do point out that Amazon and other suppliers have been retailing PAYG and contract phones for years. But nobody’s cut the operator out before.

We shall see. What do you reckon?