Well, the much anticipated, much hyped Google phone turned out into a completely new operating system called Android that is supposed to be open and free. Meaning thereby that manufacturers could use it for developing their smartphones without having to pay for or license an OS such as Symbian or WinMo. The idea behind the entire scheme of things is deriving advertising based revenue and thus reducing the cost of the phone. However would this business model really make a difference? Would it actually revolutionarise the way we use phones? Would it be spectacular? The more I think about it, the less convinced I am.
The question on my mind is, how much of an effect will this have on pricing. The absolute maximum amount a manufacturer pays a vendor such as Symbian or Microsoft for their software is not more than 5$-20$ a handset. Now even if Google is not charging this money for the OS, the largest price drop in the cost of a smartphone would be in the same region. Meaning thereby there would not be a substantial price drop.
For a high end smartphone, this is not a difference at all and in my opinion not sufficient for pulling a customer from a company such as Nokia; which is not a part of the Open Handset Alliance. The reliability of a business and the trust a consumer places in a brand would not be overcome so easily. In the high end segment there is enough profit margin, the Nokia N95 on launch was priced somewhere around 900$ now it retails for a mere 600$, all this within 6-7 months of its release. A 300$ dip in profit on each phone and Nokia is still making money on the device. In face of competition the phone could be a little more competitively placed and Nokia and S60 would prove tough to beat.