Now that all the Google IO buzz has settled down I’ve decided to write about what I’ve taken away from it. I’m not going to focus on the same news everyone else has been reporting since everyone knows the highlight reel from this
years IO. The hugely publicized and ridiculously cheap Nexus 7 is now available for $200. I ordered mine 20 minutes after it was announced. However a more interesting price point to me was the $50 price drop on the Galaxy Nexus.
Ever since the advent of the feature phone we have been locked into carrier contracts in order to get a decent phone. This is extremely evident if you look at AT&T’s website. If you want a modern Android phone off-contract you are looking at a $500-$600 purchase. This is approximately the price of a cheaper end laptop and for the average consumer a very high price point for a device with a lifespan less than 2-3 years. The immensely popular and relatively old iPhone 4S off-contract costs a ridiculous $649. So as it stands buying phones off-contract is not a feasible option unless you are a well paid tech enthusiast.
All of this is starting to change since Google IO. The Galaxy Nexus, even though it is a 8 month old device, is running the latest version of Android (4.1 Jelly Bean) and arguably the best running Android phone. So for the sake of argument the Galaxy Nexus is a modern phone. By dropping the price point of the Galaxy Nexus to $350 dollars Google is now saying that it is a viable solution to buy your phone from Google without a contract or being carrier locked. This price point is very important because $350 feels more like a pleasure purchase and less like a major decision purchase. For example it is closer to the price of a gaming console, portable gaming system or an iPod touch. This shows a completely reasonable system for someone to buy the Galaxy Nexus and not feel as bad for upgrading to the new phone in a year.
This change will probably have some lasting effects in the industry over the next couple of years. First and most notable, more and more people will begin buying their phones off contract and not through their carrier. This will mean manufacturers will be in control over their customers devices instead of the carriers. This will result in less carrier bloatware, less carrier restrictions most importantly faster updates. Second, carrier hopping will probably increase exponentially. Now that consumers will be without contracts, when the carriers start charging erroneously and increasing rates consumers will now be able to leave without having to suffer harsh termination fees. This will most likely result in more competition between the carriers and better service. Possibly the most important repercussion of this is that Google will be able to communicate with their customers much better than they could before. In a way that in the past only apple did regularly.
As far as other phone manufacturers, hopefully we will see some of them selling their phones off-contract for a reasonable price. In my opinion this would do nothing but help the industry as a whole and the consumers will definitely benefit.