News in a nutshell:
- Co-developed Android devices which will include Google apps, and will also be open to 3rd party apps
- Devices will include Android Marketplace (App store), Google Maps, YouTube, and Google Voice (VoIP)
- 2 devices initially to be launch in next few weeks
- Did not mention who is actually making the hardware, except to say that it's not Google
- Does not necessarily impact strategy with other devices/OS, Verizon Wireless (VZW) will still have plenty of other devices/OS in portfolio
You could feel the love on the conference call between VZW and Google. I bet Microsoft is not feeling the love, however; they paid VZW $550m in guarantees to be Verizon's search partner.
With this deal, VZW has opened the door for device/OS vendors to put their own content and services on the handset, a significant shift in strategy from its previous "walled garden", VCast-only services environment for feature phones. Although VWZ has to date exerted less control over smartphones in its portfolio, e.g. its customers can buy Blackberry smartphones or a number of Windows Mobile powered devices with no restrictions to getting third-party applications and content onto those devices, it has been able to tolerate this while those devices have accounted for a relatively small volume of sales. However, with the smartphone installed base forecast set to reach 170 million in North America (47% cellular user penetration) by 2013, VZW has clearly felt the need to exert some degree of control, rather than allow vendors to run the show entirely.
It's not as simple as open versus closed, but rather that there are degrees of openness, and through this agreement Verizon has definitely opened the door further. It's like opening Pandora's box, though, and there's no shutting it again.