News

Google's much-hyped smart phone is coming to Canada – but you won't see it in any storefronts.

Google Inc. GOOG-Q announced Tuesday that the Nexus One, released in the United States in January and considered the most advanced among dozens of phones running Google's Android mobile operating system, is now available for purchase by Canadians. But none of the major carriers in Canada will be selling the device.

Instead, Google offers it direct to consumers via its own Web store, cutting out the middleman and allowing customers to subsequently decide from which carrier to buy voice and data plans. Google sells the Nexus One for $529 (U.S.). The phone is sold unlocked.

Even though the phone is expected to work with SIM cards from most Canadian carriers, Google appears to have built an informal relationship with Rogers Communications Inc., listing the carrier by name in its press release.

But unlike most of the phones it carries, Rogers (and other Canadian carriers) will not do much more than offer voice and data plans – Google will handle all customer support and the phone will not be branded with the Rogers logo.

By not allowing wireless providers to sell the phone in their own retail stores, Google has essentially cut a chunk of revenue from the carrier's business model, said Iain Grant of telecom consultancy SeaBoard Group.

“It certainly is disintermediation,” he said. “The entire revenue model they've built their business on is under threat.”

Mr. Grant, who does consulting and research for clients in the telecommunications sector, said Rogers president and chief executive officer Nadir Mohamed has been trying to steer the company toward a one-stop shop model: a place where Rogers offers – and charges for – every service a customer could possibly need.

“That's the type of thing that really scares Nadir, that's not the way they built they house that Ted [Rogers] built,” Mr. Grant added. “Once upon a time, if you had a Rogers phone, whatever you did, whether you were shopping for a ring tone, you were at Rogers' cashier.”

Although the Nexus One will bring in high-revenue, data-using customers, it is unlikely to bring in many of them, said National Bank Financial telecom analyst Greg MacDonald.

“It's an iconic device, to the extent that it's Google's device – it's a cachet name,” he said. “But if it will not be sold retail here, I would suspect that the subscriber impact would not be significant.”

Google also announced yesterday that Canadians can now download paid applications for Android phones. Previously, only free apps were available, a significant deterrent given the importance of applications to smart-phone users.