Nexus One: A $350 Penalty so you can Access AT&T?

Two years ago I discussed how Sharper Image could change the way cellphones are sold in the US – they offered an array of unlocked phones and the retailer seemed like the right kind of outlet to make the change to open wireless communications in the US happen. I wondered if this would start a trend saying:

There may be an opportunity for the company as currently if you want to buy an unlocked phone you have to search the Internet. Sharper Image could become the “unlocked phone store” if they play their cards right.

The company offers a variety of phones and I haven’t had a chance to try any of them yet. If successful, one wonders if other companies such as Brookstone will get into the act. Interestingly I imagine that companies like Costco, Best Buy, Circuit City and Radio Shack will not get into the “unlocked” game as they all have relationships with wireless carriers who would likely frown upon such a new business idea.

Fast forward – there is no trend towards unlocked phones in the US and Sharper Image went bankrupt meaning going to the mall has lost some of its purpose in my life. Thankfully there is still Radio Shack, Brookstone, the Apple store and a slew of carts manned by aggressive immigrants from the world over. Do you have any idea how much useless hand cream and nail files my family has picked up last year? Well, at least we are helping the economy.

Yesterday Alan Percy wondered a similar thought about a trend towards wireless openness – but this time he uses Google and the Nexus One as the shining example of unlocked at its finest. As he points out, if you go to Google’s phone site you can buy an unlocked phone for $529 or a T-Mobile version for $179.

But think this through for a second – you would be paying $350 for an unlocked phone – more specifically for a phone which can run on the only other US GSM carrier – AT&T. For most users this would be the communications equivalent of visiting a dominatrix. Speaking of painful experiences, this is not too unlike sitting through AT&T’s latest commercials featuring the otherwise likable Luke Wilson. Apparently the economy is hitting Hollywood harder than we thought.

Of course the power of an unlocked phone can be seen when you leave the country but with the US dollar in the dumps, one would imagine trips to Paris aren’t going to be picking up soon.

Not to say there won’t be demand – I just expect it to be muted because you can’t run the phone on the Verizon network – yet. Verizon of course uses CDMA not GSM and subsequently doesn’t have SIM cards – perhaps this will change in the future and I agree with Alan that Google is in a better position to change wireless telecom than Sharper Image.

As we move to 4G networks we will hopefully see LTE make interoperability more achievable but for now, the benefits of using an unlocked phone in the US are severely limited.

Come meet Alan Percy in person at ITEXPO and 4GWE in Miami, January 20-22, 2010 and pick his brain.

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