Google Phone Could Cost $500 Or More

Google plans to sell an Android phone made by HTC next year direct to consumers, the WSJ is the latest to report.

This as opposed to selling it through carrier stores, which is how consumers buy the vast majority of cellphones in the U.S. "Users will have to buy cellular service for the device separately," Jessica Vascellaro writes for the WSJ.

The problem: Unless Google is subsidizing the phone itself -- or has deals with carriers to subsidize it once a consumer picks them as their wireless provider -- it could be prohibitively expensive.

A comparable high-end smartphone -- something like Apple's iPhone -- costs up to $500-$600 wholesale, before a carrier subsidy in the $300-$400 range. (Or maybe even more.) So if Google will really be selling phones at full retail -- and they're going to be as good as the Droid or iPhone -- they could easily cost $500, $600, or more.

No matter how awesome Google thinks its phone is, it will have a very hard time selling a $500 or $600 phone. So if the goal of this phone is to increase Android's market share, and there really is no subsidy, it will likely fail. (Google is not a dumb company, so we assume they have this figured out. But so far, no details.)

Update: It appears the phone will be ideally serviced by T-Mobile, as that's the 3G radio bands it's suited for. Perhaps T-Mobile will offer a $200-300 service credit (in lieu of a device subsidy) for those signing 2-year contracts.

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