Verizon's Google tablet: a ruse or the real McCoy?

Phil Goldstein

Verizon Wireless' (NYSE:VZ) planned tablet running Google's Android platform raises a lot of questions, especially because both Verizon and Google have been scant with the details so far. Google is staying quiet and Verizon is expected to release more information soon. Aside from which company will build the tablet, how much it will cost, what its features and applications and data pricing will be (like I said, lots of unknowns), the biggest question for me is what this says about Verizon's relationship with Google.

In the wake of the tablet announcement, there was an interesting theory put forward by the Business Insider, which basically argued that the Verizon/Google tablet--billed as a rival to the iPad--is a ploy meant to give Verizon leverage in negotiations with Apple (NASDAQ:AAPL) for the iPhone. I will admit, it is very unlike Verizon to make announcements about products until they are nearly complete. However, I don't think this is designed to threaten Apple or give Verizon an upper hand in any negotiations that might be going on (to be clear, I have no idea if Verizon is going to get the iPhone this year).

The tablet announcement should not have come as a surprise. When the two companies announced their strategic partnership last fall, they promised a multi-year Android product roadmap. A tablet likely is just one part of that larger effort. Indeed, at the Consumer Electronics Show in January, Motorola (NASDAQ:MOT) demonstrated a prototype Android tablet running on Verizon's forthcoming LTE network. Motorola said that, if commercialized, the device could be released for sale by the fourth quarter of this year, which is when Verizon's LTE network is scheduled to go live in 25-30 U.S. markets.

Verizon marketed the Motorola Droid incessantly, and now has a new Android phone to tout, the HTC Incredible, which compares favorably to the iPhone. Verizon even put the iPhone on the island of misfit toys as part of its ad campaign last year knocking AT&T Mobility (NYSE:T). Android is Verizon's main horse in the smartphone market right now, with Research In Motion's (NASDAQ:RIMM) BlackBerry platform coming in second and Palm's (NASDAQ:PALM) webOS an afterthought.

It's entirely possible that Verizon will get the iPhone--no one says they can't support both Google and Apple. For right now though, Android is where Verizon has lavished the most attention and praise--Google and Verizon are going to be together for the long haul. Aligning with Google also helps Verizon project its commitment to "openness," which stands in stark contrast to Apple's closed (and financially successful, mind you) mobile system.

I think Verizon has bet big on Google, and with this tablet, it's putting more chips on the table. --Phil

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