May 16, 2012, 3:18 PM

Google may team with mobile device makers to sell devices directly

The move would help Google control Android and compete with Apple, experts say.

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Google Inc. may be unhappy with the way its popular Android mobile operating system is proliferating. Device makers and carriers are selling devices with different versions of Android. This translates to devices with different mobile operating system and mobile app capabilities—a fragmented market far different from the consistent, harmonious world of Apple Inc., where its three devices can run the same operating system.

Google looks to be readying a move to combat this problem. It plans to give numerous smartphone and tablet manufacturers advance access to new versions of Android and in return sell the manufacturers’ new mobile devices directly to consumers, according to a report in today’s Wall Street Journal citing sources close to the matter. Google currently gives one manufacturer the latest version of Android and later releases that version to other hardware makers; devices then are sold through wireless carriers, who can add apps and make other changes to the way Android is used on a device.

“The current practice of partnering with a single vendor and launching new software deliberately fragments Android, leading to software developers targeting older versions of the platform,” says Peter Han, analyst, consumer devices, at research and consulting firm Current Analysis Inc.

Google last month began selling the Samsung Galaxy smartphone through its Google Play marketplace. It tried and failed with the Nexus smartphone two years ago.

Google did not respond to a request for comment.

This comes at a time when Google is closing a deal to buy Motorola Mobility Holdings. Google potentially could create smartphones of its own through Motorola, phones that potentially could be the first with whatever the latest version of Android is at the time. But if the report is true, Google’s move would level the playing field with manufacturers in an attempt to present the market with one consistent version of Android, much like Apple presents a single version of its iOS operating system.

“This is an attempt to provide multiple outlets for flagship devices to rein in some of the fragmentation we see in Android at the moment,” says Chris Silva, mobile analyst at technology research and consulting firm Altimeter Group. “This fragmentation comes from two places: From carrier-led initiatives to stifle upgrades on existing devices to drive new handset sales, and from manufacturers themselves adding feature and function overlays to differentiate a commoditized operating system.”

If Google sells smartphones directly, the price for the average device would likely be double what it is if bought through a wireless carrier with a contract for voice and data services, experts say. U.S. consumers, unlike in many other countries, are accustomed to paying lower prices—or even getting phones for free—when signing a contract. Could direct sales prices cause sticker shock?

“This comes right at a time when alternative carrier arrangements are gaining some traction with consumers,” Silva says. “Unlimited talk/text/data offerings from companies such as Straight Talk have a price tag of $45 per month and no contract. That’s far cheaper than competitive carrier offerings. If you buy a Galaxy Nexus for $399 direct from Google, you’re making out better than paying $229 for the comparable Galaxy S II handset through T-Mobile that requires a two-year contract for $79 a month. You’re saving more than $800 on just monthly service over the course of two years. Wireless companies like Straight Talk and Voyager Mobile could shift attitudes.”

In the end, it would seem the big play Google would be hoping to make is getting its Android house in order to match Apple apples to apples.

“One of the major benefits Apple enjoys is that users have a clear expectation of experience,” Silva says. “They buy anything from an iPhone 4S to an old 3GS or even an iPod Touch and the experience is consistent. Apps that their friends have told them they have to try are available and work. On Android, this is not the case, with links to apps approved with one version of the operating system leading to a dead end in the Google Play store, or simply not being searchable due to incompatibility. Add to this the flood of new, low-cost devices that are coming on market with older iterations of Android that are missing newer features or providing a sub-par experience and you’ve got a shaky story to tell potential buyers.”

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