Carriers are Blowing it with Android

by Dave Michels

The wireless carriers are making a big mistake with Android phones – they are requiring they be purchased with data plans.

I can see their (flawed) logic. What they really want are expensive recurring service contracts, the Android phones are really meant for use with data plans, so forcing customers that want Android phones to purchase two year data commitments makes perfect sense. Except one thing; it doesn’t.

They are missing a whole market – namely teenagers.

I bought my Droid today and with it, dragged my kid along from Tmobile to Verizon too. The reason is because the individual plans are too expensive compared to family plans. My kid doesn’t care and wasn’t under any contract any more. In fact, Verizon offered him a new shiny phone and Tmobile wanted to sell him an upgraded phone.

So now the fun part – phone shopping with a teen. He evaluates phones differently than I do, solely based on its texting ergonomics. He hardly ever makes a call, and he knew a data plan wasn’t even on the table. He needs to be able to type with one hand on the sly in the classroom, and two handed for more thoughtful conversations. He went thru the entire line of Verizon phones from a texting perspective and of course texted his friends for opinions.

I like free phones. Especially as a new customer they offer some decent free phones. But he rejected all the free phones. Then they go from about $40 to $200. Of course, he wanted the $200 phone. I am thinking $200 for a non data phone… yeah right.

One important piece of background information I need to mention is he also wanted (a few months back) anApple Touch. His friend has one and finds it a superior alternative to Nintendo gaming devices – plus with wifi you can do things like check your email – even at school. Although I’ve had my share of Apple devices including a TiBook and at least 5 iPods – I declared no more Apple purchases in this household about a year ago. That is potentially another blog post. So suffice to say no Touch here, but it brings me to the obvious conclusion of the best phone to get the lad.

The Android Motorola Eris. It is $100, so a bit more than I wanted to spend – but really two devices in one. It would be his phone and texting partner – plus his Touch alternative. He could download games, music and various other apps – and use it to check his email at home and at school.

Apple clearly demonstrated with the Touch there is a huge market for non phone devices – so why don’t the carriers encourage or even offer Android phones with their non data plans? I don’t know the real cost of these devices – only the subsidized retail prices. The LG Touch phone is $199 and the Motorola Eris is $99. I will assume that they could offer the Eris for $199 without a data plan. But consider the value proposition if Verizon (or others) offered an Android phone without a data plan:

1) My kid starts buying apps in the marketplace (much like Touch users do in the AppStore). This ties him to this and similar devices for quite some time as it increases the cost of dumping the platform. Some of those apps will make money for Verizon or the (fill in the blank) wireless carrier. There is no loyalty stick with the non data phones.

2) My kid will increasingly use the email and other apps that require wifi or Internet. The times where there is no wifi will increase and frustration will grow. It is just a matter of time until the kid requires a data plan. I know that already. But now it will be cheaper to change carriers when that time comes.

3) I am willing to pay more for this phone/Touch device because it has more purpose. Buying him a phone does not solve the game device problem, email problem, or other apps problem. The fact is there are lots of apps in those stores – none of which will work on his new Verizon phone.

4) No carrier is offering Android without a data plan – yet they are all vying for a competitive edge – especially regarding hardware. A carrier with Android without data would have an edge.

5) I haven’t even mentioned the (free) social apps – These guys are in Facebook every 10 minutes. They have the cell phone on them – the laptop is only attached part time. To be able to update status with one hand while flipping channels with the other hand is pretty cool.

6) As I illustrated above – I would have paid more for such a device than a non data phone. If Verizon is wondering how they could have gotten more out of me -here is the answer.

We live in a connected world – and although carriers may only value that when its connected via their network, they are being very shortsighted. This is the same logic Apple, Dell, and Google use with their huge educational discount programs – train them while they are young and keep them.

Teenagers today have cell phones. They don’t have data plans, but why the carriers don’t encourage them to use Android phones is a mystery to me. They are missing a huge opportunity.