Project Fi and Nova: Google's Secret Plan to Take out the iPhone and Dominate Cell Phones

By

I ran into an interesting piece over on the somewhat obscure site “Android Police” this week by Cody Toombs. It looks at a secret Google program called Project Fi, and breaks down a piece of firmware that was distributed to testers as part of a Nexus factory image related to that program. They consider the code to be accurate, and it says a lot about the MVNO that Google will be launching shortly. This MVNO goes after Apple’s one glaring weakness with the iPhone Weakness

If you have an iPhone -- and given the number of people that own them, chances are you do -- there are likely a number of things that you find annoying with the device. Many of them probably have little to do with Apple and everything to do with AT&T the carrier that launched the iPhone in the U.S. and still has the dominant iPhone share.  

You see, what makes the iPhone very different from iPods and iPads is that a major component of the solution isn’t provided or controlled by Apple, and given that Apple’s satisfaction scores are really high and AT&T’s are really low, that is one huge glaring hole in Apple’s end-to-end solution.

Now, it has long been theorized that Apple would do an MVNO. An MVNO is a Mobile Virtual Network Operator, and we have a lot of them.  These folks set up their own carrier service but sit on top of someone else’s network. For instance, I use Straight Talk as a backup mobile phone service myself, and they reside on top of AT&T’s network and are vastly easier to work with (and a ton cheaper).  

So it was believed that Apple would eventually bite the bullet and set up their own MVNO to ensure a better customer experience. The problem is that MVNOs can collect a lot of money but they don’t make much profit. Imagine an MVNO at the size Apple would need pulling in billions of revenue but only millions in profit. Apple lives under massive margins and this effort would do ugly things to their P&L and likely collapse their stock price. So, economically, unless Apple gets really creative, they can’t do an MVNO.

Google’s MVNO

Google, however, is a very different beast. They not only don’t really care that much about profit -- they’ve gone into some businesses that didn’t seem to even care that much about revenue. They make their money off of ads and that revenue is fully decoupled from what they sell. So for them going into an MVNO, even one that lost money, isn’t really a problem and their long-time stated goal is to eventually provide smartphone service for free.  

They are working on a service code named “NOVA”, which is expected to be their very reasonably priced MVNO and it, allegedly, is going to operate across T-Mobile and Sprint’s networks, which would collectively give them coverage in line with AT&T and Verizon.  

The leak showcases what may be the most aggressively customer-friendly cell phone service on the planet. Manageable from within an app on the phone, this service would fully pay just for what you use. Yes it would have discount tiers, but unlike most other services that don’t even let you pass forward unused minutes, you’ll get a credit back for anything you don’t use and this credit will apply to your next bill. If you go over, you are simply charged at the rate you are paying; no big price escalation like you probably get from your existing carrier. 

All account operations from selection and changing number, to closing or putting an account on temporary hold can be done from within the app.  And it appears all statement, payment, and auto-pay capability is also contained in the app. This will keep Google’s overhead very low and allow them to provide. Remember they won’t be looking at profit, offering the service at an even more aggressive price.  

You can put all of your stuff (tablet, PC, etc.) on the same plan and have one data plan covering all of it and, if you have multiple phones, you can switch phones through the app (without swapping out the SIM). Granted there will likely be a delay as all the pointers are switched, but Google should be an expert at this making the delay amazingly short. 

Now it looks like this is set up for Google Pay, their Apple Pay competitor, so if you use your phone as a credit card (something that is growing in popularity), you can manage that activity in the app as well and it should appear in a separate section itemized.

Of course this would integrate Google Voice, a powerful though surprisingly relatively little-known service that allows you to use one phone number for everything. Yes, you can have a single phone number that rings everything you own with a dial tone, for free. (If you like this idea but are a little nervous about Google’s motives, Ring Central has a $10 a month service that is a bit better). 

They will be monitoring your calls and activities and reporting this to advertisers. You can opt out but I’ll bet that results in a higher monthly charge. It'll be interesting to see how many people opt out. 

Finally while likely not available at the start, at least not in the U.S., there are apparently provisions for free roaming internationally. This would be huge in the EU, and given the cost savings, make it hard for anyone else to really compete with Google.

Wrapping Up:  Only Nexus?

The belief is that this service would only be available with the Nexus phones at the start, but imagine cell phone charges that are a fraction of what you now pay and a carrier experience that was wonderful as opposed to painful. Would that be enough to get you to consider switching to a Nexus phone from an iPhone? 

Whether they can pull this off is something else again, particularly in the face of an EU anti-trust investigation but, if they can, they could singlehandedly turn much of the smartphone market on its ear. Granted, at some point AT&T and Verizon would take notice and even T-Mobile and Sprint would start wondering if this MVNO thing was in their best interest, but Google is arguably the most powerful company in the world now. 

By the time these firms catch on that Google is on a world domination tour it may be all over. I doubt many will care that much of this is just one phone, but should Google jump this to all phones -- given the massive cost- and potential customer-satisfaction advantage -- I wouldn’t want to be the guy explaining what happened to AT&T’s CEO.

I don’t think Apple has a choice, in the face of this kind of a move; they have to find a way to respond or they’ll see an unusually large number of their customers move over to Google and Nexus. And, I think, that very well may be Google’s primary goal. 




Edited by Stefania Viscusi
Get stories like this delivered straight to your inbox. [Free eNews Subscription]

President and Principal Analyst, Enderle Group

SHARE THIS ARTICLE
Related Articles

Can Science Outsmart Deepfake Deceivers? Klick Labs Proposes an Emerging Solution

By: Alex Passett    3/25/2024

Researchers at Klick Labs were able to identify audio deepfakes from authentic audio recordings via new vocal biomarker technology (alongside AI model…

Read More

Top 5 Best Ways to Integrate Technology for Successful Project-Based Learning

By: Contributing Writer    3/19/2024

Project-based learning, also popularly known as the PBL curriculum, emphasizes using and integrating technology with classroom teaching. This approach…

Read More

How to Protect Your Website From LDAP Injection Attacks

By: Contributing Writer    3/12/2024

Prevent LDAP injection attacks with regular testing, limiting access privileges, sanitizing user input, and applying the proper encoding functions.

Read More

Azure Cost Optimization: 5 Things You Can Do to Save on Azure

By: Contributing Writer    3/7/2024

Azure cost optimization is the process of managing and reducing the overall cost of using Azure. It involves understanding the resources you're using,…

Read More

Massive Meta Apps and Services Outage Impacts Users Worldwide

By: Alex Passett    3/5/2024

Meta's suite of apps and services are experiencing major global outages on Super Tuesday 2024.

Read More