The Internet was abuzz this weekend with news of a possible Google-branded mobile device. Rumors have it that Google is working with HTC to create a handset they can call their own. Rumors also have it that this handset will be sold unlocked, without the support of a major carrier.

Some people are responding as if this is a “game changing” announcement. I’m not sure I understand why. Nokia has been selling unlocked, carrier agnostic phones for a few years now – both online and through their stores in New York and Chicago. It hasn't displaced the market in any significant way.

There are only two major GSM/UMTS carriers in the US: AT&T and T-Mobile. Of those, only one of the carriers (T-Mobile) has no-contract plans with data access. AT&T has a no-contract pay-as-you-go plan, but data is limited to 100MB/mo before you start to incur $0.01/KB overage. Thus, an unlocked Google phone is, essentially, a T-Mobile phone.

Moreover, an unlocked phone with no carrier agreement means that you have to pay for the hardware out of pocket, since there are no carrier subsidies like there are with the iPhone. How many people are going to spend $500 and then get locked into a 2-year contract with AT&T? And why would you even want to get service with AT&T? Their data network is crumbling under the weight of the iPhone.

A more disruptive move was when T-Mobile announced they would be offering no-contract plans, in addition to providing 20-month, zero-interest, financing options for handsets (in lieu of contract subsidies). Financing like this means it’s possible for Google to actually move handsets at retail if they partner with T-Moble as a launch partner. If they don’t partner with T-Mobile, they better provide a similar financing option themselves. Few people are going to pay the $400-$600 that a non-subsidized Google Phone is estimated to cost when Apple and AT&T are selling $99 iPhones; and you can get a BlackBerry Bold 9700 from T-Mobile for just $25 out the door (and $25/mo for 20-months after that).

It's unforunate, but a Google Phone doesn't change anything.

I jumped on the iPhone when it first came out. In fact, I'm one of the only people I know who even has a first generation iPhone. The day after it came out I went to the store to play with it just to see what the hype was about. I wasn't planning on getting one. I didn't even want one; not to mention the fact that I didn't have the money to buy one. After about 30-seconds of playing with Safari I decided that I had to have it. I went to the car, thought about it, then went back into the store and bought one.

Two years later, I've spent over $3,000 on the iPhone and the associated AT&T service plan. Today, I canceled my plan with AT&T, ported my number over to T-Mobile, and purchased a BlackBerry Bold 9700.

Why? Here's why:

• The iPhone is a terrible phone. Voice quality is terrible. Dropped calls are frequent. Calls often fail to even dial. Voicemails are delayed. Incoming calls constantly go straight to voicemail (which is then delayed).
• The iPhone is awful if you have more than one email address. The iPhone can only support a single Exchange connection. If you have multiple email addresses or calendars you have to pick the one that you want to be pushed. Everything else must be fetched via IMAP or POP at 15-minute intervals.
• Push email is unreliable. Many times emails are delayed. *Note: I've only noticed this with Google Sync, and I'm unsure if it's a problem with Google, Apple, or AT&T.*
• You can only have one email signature. Again, the iPhone just isn't set up to handle multiple email addresses.
• Battery life is abysmal. It's rare that you can even get through a full day with a single charge. This is why you now see every single socket in the airport occupied by an iPhone user. If you want your phone to be usable for anything that even resembles an extended period of time (by iPhone standards – more than 12 hours) you need to turn off Bluetooth, turn off Wi-Fi, and cut the brightness in half.
• It costs $100/mo just to have one.
• It costs $100/mo and you can't even tether it to a computer and use the data plan.
• As good as it is at text messaging, it's terrible at instant messaging. Since you can't run anything in the background, you really can't use IM at all.
• The inability to run processes in the background also makes applications like Google Latitude useless.

The reality is that the iPhone is a good pocket tablet. The iPhone is evolution of the Apple/Newton MessagePad, not the evolution of the phone. It's a deplorable phone. I would be more inclined to use an iPhone if it included no phone functionality at all. Maybe if the iPod Touch ever gets a camera, GPS, and persistent data connection I'll go back.

The best thing about the iPhone is the browser. The device would be better positioned as a "must have" if they scrapped the phone functionality entirely and worked out a carrier agreement for data like Amazon has done with the Kindle. Given the size of the application library, that's probably possible. Apple could pay for bandwidth by giving the carrier a portion of revenue generated from the mobile iTunes store. In fact, if an iPhone existed that ONLY featured a browser (even sans the ability to run applications) and some kind of persistent data connection, I'd buy it again. That's why I bought it in the first place.

Goodbye, iPhone.
Hello, BlackBerry.

Not sure how I just found out about this now, but apparently T-Mobile has a whole new strategy in terms of phones and service plans. Somehow this slipped under my radar, as apparently this news is several weeks old. I've been waiting for something like this for a long time. I've been waiting for someone to break the cycle of the overpriced, heavily subsidized, proprietary nonsense that has plauged the mobile phone market in the US for the last decade.

T-Mobile is now offering no-contract plans, with unlimited text and data for between $60-$80/mo. $60/mo gives you a 500 minute voice plan and the $80/mo plan gives you unlimited talk time. That same plan for an iPhone on AT&T costs $150/mo. That same plan for a Blackberry on Verizon costs $150/mo. With Verizon and AT&T you're also stuck with a 2-year contract.

Sprint has been offering a relatively cheap ($99) unlimited plans for a while now. But Sprint is an EVDO network that requires you to buy an EVDO phone... which is locked to the Sprint network... which requires a 2-year contract. Sure, it's cheaper, but you've only got a handful of phones to choose from and you're still locked to the network. T-Mobile, but contrast, is a GSM/UMTS carrier. That means you can use any phone that will accept a SIM card. That means you can take your phone to another network. That means your phone will work outside the US with ease.

What's more, they've come up with an interesting solution to the problem of subsidized phone sales in the US. People in the US don't like to pay for things. We love to subsidies. We love the cheapest possible price at point-of-sale, terms be dammed.  Most carriers, including T-Mobile up until a few weeks ago, sold phones at a loss and made up the money (and then some) on the obscenely expensive monthly plans. Most carriers effectively subsidize the cost of the phone. You don't have a choice in the matter. That's why you have to pay a bucket of money every time you try upgrade your phone before the phone has been paid off. But even after it's been paid off... you keep paying for it. It's madness!

In addition to subsidzing phones, T-Mobile now offers financing. You can buy a $500 phone and pay it off as you see fit. You can pay it off in 4 months or 20 months; and as of current, interest free. This is the kind of shift that could change the way we buy mobile devices in the US.

What this all means is that consumers can now walk into a T-Mobile store, purchase a $500 smartphone (but only pay $20 out the door) with an unlimted data plan for $80/mo. You can get a new phone AND a plan for less than the price of the cheapest iPhone. That's game changing.

And what does this mean for me? This means I'm ditching AT&T and moving to T-Mobile. I'm going to wait for the new Samsung Behold II to be released before I decided what Android phone to go with, but my days of 2-year contracts and $100+/mo phone plans are over. I'll take the $500 a year I'll be saving and spend it on something good... like a new phone.