Verizon Puts Down Its Big Red Foot
Control. It's all about control.
Verizon's (NYS: VZ) control complex is largely attributed to why Apple (NAS: AAPL) granted archrival AT&T (NYS: T) exclusivity for the first iPhone in what now seems like ancient history (that was so 2007). Ma Bell was willing to make control concessions that Big Red initially wasn't willing to swallow.
When it comes to Google (NAS: GOOG) Android, some of the operating system's purists have always felt frustrated with the third-party modifications that bog down the OS. Not only do carriers like Verizon and AT&T enjoy preinstalling proprietary apps -- aka bloatware -- but hardware vendors like Motorola Mobility (NYS: MMI) , HTC, Samsung, and LG can also have their way "forking" the OS with UI customizations and making it their own.
Such has been the primary appeal for Google's own sanctioned Nexus brand: It has always been the purest form of Android available to mere mortals. Google officially started the lineup with the HTC-built Nexus One, which was then followed up by the Samsung-built Nexus S. The first "official" Google phone running Android was technically the T-Mobile G1, but every Nexus phone since has served as a baseline that other Android phones are benchmarked against.
The newest addition to the family is the imminent Galaxy Nexus, also assembled by Sammy, which is also the first to carry Android 4.0 Ice Cream Sandwich. However, Verizon has put its red foot down and asked Google not to include Google Wallet, the NFC-based payment technology. So far, Sprint Nextel (NYS: S) is the only carrier that has Google Wallet coursing through its wireless veins.
While it's easy to initially jump to the conclusion that Verizon is trying to reinforce the ISIS payment network it's building with other carriers, the company has gotten in front of the potential PR fumble and clarified that it didn't "block" the functionality, but rather that Google Wallet "needs to be integrated into a new, secure and proprietary hardware element in [its] phones." Verizon also brought up concerns over "security and user experience."
Unfortunately, this statement is mostly PR fluff, since it implies that the Galaxy Nexus' impressive hardware specs don't already include sufficient parts. The phone is supposed to already include the requisite NFC chip along with a secure embedded element, so Verizon's insinuation is false. ISIS is the real culprit, if you ask me.
The two titans are still having "commercial discussions" to potentially bring it to the phone later on. The episode highlights the importance of the coming NFC-based mobile payment revolution. Its significance is one reason NFC chipmaker NXP Semiconductors (NAS: NXPI) is an official Motley Fool Rule Breakers recommendation (don't forget to sign up for a free trial to read the full thesis).
Add Google and Verizon to your Watchlist to see whether Google Wallet makes it to the Galaxy Nexus running on Big Red's network. Still need more on NFC? Check out this free video report on how the technology may soon make your credit card worthless.
At the time this article was published Fool contributorEvan Niuowns shares of Apple, AT&T, and Verizon Communications, but he holds no other position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Google and Apple.Motley Fool newsletter serviceshave recommended buying shares of Apple, NXP Semiconductors, and Google and creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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