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Ads To Offset Cost of Unlocked Google Phone? 161

CWmike writes "Google isn't talking publicly about reported plans to sell a powerful Android-based smartphone called the Nexus One directly to consumers next year, but the idea is already raising eyebrows with analysts. The chief concern is that selling an unlocked phone directly to consumers, probably online, could be twice as expensive as buying one through a carrier. The unlocked approach has largely failed in the US, with the world's biggest phone manufacturer, Nokia, doing poorly with the concept. Nokia recently announced that its two direct-sales stores in Chicago and New York will close early next year, while online sales of unlocked devices will continue. Conceivably, Google could offer its phone at a price comparable to a subsidized phone from a carrier — as long as customers agree to receive mobile ads on the devices. Since advertising is central to Google's revenue model, that approach might make some sense, analysts said. 'Google doesn't want to be in the phone business or the mobile carrier business, so this must be about something else, and that's the advertising business, since Google is in the business of selling ads,' said Kevin Burden, an analyst at ABI Research. In one mobile advertising model being tested in Germany, users agree to receive a certain number of ads on their phones to reduce their monthly cellular and texting rates, although reducing the up-front cost of the actual device is relatively novel. Reinforcing the idea of using mobile advertising with direct sales of unlocked phones, Google bought AdMob in November."
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Ads To Offset Cost of Unlocked Google Phone?

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  • No No No No!!!! (Score:3, Insightful)

    by h4rm0ny ( 722443 ) on Tuesday December 15, 2009 @02:19PM (#30447566) Journal

    I am sick of everything trying to sell me things all the fucking time. STOP!
  • by mlts ( 1038732 ) * on Tuesday December 15, 2009 @02:30PM (#30447706)

    As it stands in the US, there are two well entrenched market niches for smartphones. The first of which are the unlocked phones (or the phones one pays full retail price for from a provider.) This is about $400-$600. The second is the provider sponsored phone where one pays the cost of the phone via a contract. The price ceiling in the US is effectively set for this by Apple at around $200.

    The ads wouldn't be welcomed in the unlocked phone arena. If I pay the premium price tag for an unlocked phone, I won't be buying one that slings ads at me. If the contract changes while I have the phone, I'll be rooting the device and yanking that "functionality" out, or not accepting the changes in my contract and will toss the phone in the garbage. Then I will go with a provider who wouldn't pull that on me.

    If I were paying for a phone subsidized over 2 years, ads are not welcome here either. If my phone gets an OTA update to become an ad vomiter, that is a change in my contract that I do not have to accept, and I will trash the phone and change providers.

    So, where would the ad-supported device model come to play? I see only one place, and that is the low end market, such as the prepaid phones one sees for sale for $15-$30, or the "free" phones that come with a 1-2 year contract. Maybe this market is what Google might be aiming for, where people would tolerate ads in return for a smartphone that costs $20.

  • Do not want! (Score:3, Insightful)

    by ickleberry ( 864871 ) <> on Tuesday December 15, 2009 @02:34PM (#30447754) Homepage
    I dunno about the rest of you, but I'd rather pay the full whack for an unlocked Maemo phone. I know we are in a recession and all, but an ad-supported phone seems going a bit far.

    If after a year I want a new phone I will sell the unlocked phone for significantly more than an identical phone that is locked, but given that the 'average Joe' would rather pay 50 a month for 2 years than 500 upfront I will be one of the few, which is unfortunately making it harder for me to source my unlocked phones

    The whole point of having a phone that runs Linux is the freedom of being able to customise and 'hack' it, not have it make sure I'm looking at the required number of ads. Far too often these days a Linux-based device only runs Linux because it saves the manufacturer the trouble of licensing a kernel or writing their own.
  • by h4rm0ny ( 722443 ) on Tuesday December 15, 2009 @02:37PM (#30447788) Journal

    I see a problem here. Not for you, but for the advertisers. You're willing to pay not to see the ads. That's almost a good thing for those positioning themselves in the middle, such as Google, as they can essentially extort money from you: "pay up or be blasted by ads." But it's really bad for the actual people selling products because the people with disposable income and the willingness to use it are the ones who've just spent a few quid to avoid all the ads. They're even, as demonstrated by their willingness to pay, the ones who notice ads or are concerned they may be affected by them.

    It's one of those stupid situations. Like Slashdot that I have actually previously been a subscriber to (stopped because they only accept PayPal now), which has their inducement to subscribe be eliminating the ads - on one of the few sites where I'm actually occasionally interested by the ads.
  • by Just Some Guy ( 3352 ) <> on Tuesday December 15, 2009 @02:51PM (#30448008) Homepage Journal

    All of us using GOOG-411 and Google Voice have done a splendid job training their voice recognition system. Within a year, I predict that you'll be seeing ads relevant to the conversation you're having while you're still having it. "It's been ages since I've had good sushi!" -> ad for nearby expensive sushi restaurants.

  • by nitefallz ( 221624 ) on Tuesday December 15, 2009 @02:58PM (#30448114)

    He didn't say the iPhone was the best thing ever. He did state a fact though. No smartphone that's been released since the iPhone (from what I've seen) has had a subsidized price of anything over $200. Largely due to the fact that the masses would see "iPhone for $200, or something else for more.. why?".

    So.. you can shut your pie hole and learn not to assume. Straw man fallacy, look it up.

  • by westlake ( 615356 ) on Tuesday December 15, 2009 @03:00PM (#30448176)

    For example, look at the HTC Magic from Vodafone Total: 720 GBP which is obviously more than the cost of the phone

    But aren't you also paying for your baseline cell phone service?

  • Re:No No No No!!!! (Score:4, Insightful)

    by geekoid ( 135745 ) <dadinportland&yahoo,com> on Tuesday December 15, 2009 @03:06PM (#30448256) Homepage Journal

    then don't buy it.
    Pretty simple, eh?

  • by drijen ( 919269 ) on Tuesday December 15, 2009 @05:24PM (#30450034)
    Now, I didn't read TFA (who does) but based on the summary, the authors are idiots (water is also wet).
    Few buy unlocked phones because the unwashed masses, for the most part, don't know any better.
    I have long been of the opinion that it should be unlawful for a cellular company to bundle phones with plans, and tie them to their network.
    If people were forced to buy their own cell phone, and have companies forced to service it (I said service, not support) it would solve a lot of problems including:
    • Less cell phone waste. Because a good phone costs > $400, people will take care of them better. Less crap in our landfills, causing cancer etc.
    • Prices on cell phone plans would drop like a rock. No more double dipping on text messages, stupid data rate plans, etc
    • No more stupid kids with a high priced gadget they don't need (you know the ones I'm referring to)
    • Better cell phones, and faster market presence, as manufacturers will suddenly not be beholden to crap telecom companies, that restrict what the phones can actually do, rather than what the telecom wants to allow
    • Because cell phone manufacturers no longer have to deal with stupid restrictions, they can concentrate on innovating new features and better software/hardware

    In other words, this article is based on an idea that amounts to ignorant nonsense.

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