Once you realize that the Nexus One is simply a fancy T-Mobile phone, Google's pricing plan makes no sense at all. If you buy the unlocked phone without a contract, it will cost you $529, as opposed to $179 with a two-year contract. The extra $350 buys exactly nothing.
(Verizon is expected to support its own version of the Nexus One later in the year, but it isn't clear if that carrier's version of the Nexus One will support both CDMA and GSM networks or just CDMA.)
No Support and a Big Opt-Out Fee
I was surprised when I realized how big a hit users will take if they opt out early from a Nexus One contract with T-Mobile. It turns out that the fee is really two fees: $200 from T-Mobile, and another $350 from Google, which calls it an "equipment recovery fee," imposed if you drop out in less than 120 days. You can read Google's terms of service.
T-Mobile's terms of service, also posted on Google's new phone sales Web site, describe its early termination fees. Customers will pay $200 if they cancel with more than 180 days remaining on the contract. T-Mobile also allows a 14-day grace period after customers sign up.
As far as I can tell, the combined hit is the heaviest in the industry. Sure, that seems surprising. But when you think about it, a company that has never sold a phone before, is working with a weak partner, and doesn't offer much tech support for a brand-new device probably expects a lot of customers to get angry and quit. The solution: lock 'em in with a whopping big ETF. Doesn't that sound an awful lot like AT&T?
This story, "Don't Fall for the Google Nexus One Bait-and-Switch" was originally published by InfoWorld.