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Google Inc. breathed a bit of new life into its struggling Google Wallet franchise on Tuesday with the announcement that it is releasing directly to the public a new Android-powered phone that features the Wallet app. The so-called unlocked device, a Nexus smart phone, will work on any carrier network that uses the GSM protocol.
Since Google introduced its mobile-payments app 11 months ago, it has been stymied by its inability to win carrier support for the product. Only Sprint has agreed to support Google Wallet, while three of the largest U.S. carriers—AT&T Mobility, Verizon Wireless, and T-Mobile USA—are sponsoring Isis, a competing mobile-payments venture. AT&T and T-Mobile operate GSM networks, but Verizon uses a rival protocol.
The new unlocked device comes with the Wallet app preloaded, potentially making the product available to a huge new market. But the phone carries a stiff $399 price tag, since it isn’t subsidized by a telecommunications company. Also, Google will have to market the device itself without the benefit of reaching wireless subscribers through their carrier. That severely handicaps the phone’s sales potential, say some observers. “This can appeal to a small group of Android aficionados who wish to buy Google’s flagship Android phone without any limitations imposed by the carrier,” says Cherian Abraham, principal analyst at Drop Labs, Richmond, Va., in an e-mail message.
Google is selling the unlocked Nexus phone, which is built by Samsung and incorporates a near-field communication (NFC) chip for contactless transactions, on the “Devices” section of its Google Play online marketplace, formerly the Android Market. A Google spokesperson did not respond to a query regarding marketing plans and projected sales for the handset.
Google also said Sprint is making Google Wallet available on three new phone models: Galaxy Nexus, LG Viper LTE, and LG Optimus Elite. And it signed up two more merchants to accept and extend consumer offers through the wallet, Walgreens/Duane Reade and the Pinkberry chain of frozen-yogurt shops.
Separately, Google earlier shuttered a payment service called One Pass that allowed publishers to sell content to consumers online. Introduced about 18 months ago, One Pass was based on Google Checkout, a service Google folded into Google Wallet earlier this year, and had picked up most of its business in Europe. “We found it wasn’t being implemented widely,” a Google spokesman tells Digital Transactions News.
