Google (GOOG) Lands Deal With No. 4 Cellular Carrier, What Happened To No.1?

The New York Times reports that T-Mobile will be the first carrier to offer a cell phone powered by Google’s (GOOG) much-anticipated Android software. HTC will provide manufacturing, and the phone could be on sale as soon as October.

This is an important move for Google, and CEO Eric Schmidt recently told CNBC that he thinks the company can, eventually, earn more from mobile services than it can from desktops.

Gadget sites are full of buzz on the new smart phone, which could a serious challenge to the iPhone’s dominance, but here’s the question: if Google’s technology is so wonderful, why is it settling for the No. 4 carrier, T-Mobile? Was that a strategic decision? Did Google just not want to work the No 1 or No.2,, Verizon Wireless (VZ)(VOD) or AT&T (T)? It’s hard to imagine.

The Times also suggests that there may be issues with developers: "Some makers of mobile software programs have complained that creating applications for Android has been difficult, as Google has continued to make changes to the operating system and has at times been too busy to provide support to developers. Some of those software makers have chosen to focus their development efforts, at least for now, on phones that are already on the market…"

Google shareholders are understandably excited about the new phone but it’s worth remembering that when companies venture into new territory, most of the time the result is failure.

Zac Bissonnette