nexus_oneGoogle officially released their Nexus One Android phone today under the guise of a $179 subsidized price tag ($529 unsubsidized and unlocked). As many T-Mobile customers discovered today, that price only applied if you weren’t already a loyal customer. Instead, TMO customers were shafted subsidized based on their contract status and the presence of an existing data plan.

The official Google Support page describes the following subsidy tiers:

  • Nexus One without service: $529
  • Nexus One with new, 2-year T-Mobile US service plan for new customers: $179
  • Nexus One with new, 2-year T-Mobile US service plan for qualifying existing T-Mobile customers who are adding data plans: $279
  • Nexus One with new, 2-year T-Mobile US service plan for qualifying existing T-Mobile customers who are upgrading their data plans: $379

I’ve been a T-Mobile customer for a little over seven years now, and off-contract for pretty much that entire time. I’m thus now open to what T-Mobile calls their full subsidy. Except with the Google phone, where Google manages the subsidy, not T-Mobile. Since I had a $10/month sad, EDGE-based data plan with TMO, Google informed me after polling the TMO servers that I was eligible for the $150 subsidy, for a Nexus One price of $379. The next subsidy tier up is $100 cheaper for a price of $279.

The only distinction lies in whether you are “upgrading your data plan” or “adding a data plan.” This seemed like a simple enough problem to fix: I called T-Mobile support and asked them to cancel my data plan. They said it would be no problem, since I’m not under contract. I worried briefly that it wouldn’t be visible to the Google-based powers that be until the next billing cycle, but the TMO rep informed me that the change is instant. Since I knew I was buying a Nexus either way, I pulled the trigger.

Wouldn’t you know it, not five minutes later when I went to make the purchase again Google’s web store fetched my data and lo and behold, my Nexus price was now just $279. Easy-peasy, that.

The ironic part is that I’m moderately sure I could re-activate the data plan now without incurring any real additional fees in the day-and-a-half I may have to wait for the overnight shipping to get here, but I don’t use the slow EDGE service enough to warrant wrecking my cool here.

After all the dust settled, I realized how asinine Google had decided to make the checkout process by managing sales and subsidies of the device themselves. They limit you to just one rate plan during your purchase, which is more than a little infuriating as I received different answers from TMO reps over whether upping my minutes would cause Google to come after me for the subsidy. (It appears that you CAN upgrade your account to another Even More plan according to a recently-added note on this Google Support page.) The pricing rates are buried under a Support knowledge base article and not at all transparent. Google says $179 and then pulls an enormous J/K on you as they fetch your account information, seemingly pulling a figure out of thin air as it suits them. The T-Mobile reps can’t do anything about it since the purchase isn’t on their side of the pond at all. And Google is nowhere to be found.

Strange to me that a company so intent on delivering a device with their brand and full-throated support would instantly fawn off users to HTC and T-Mobile so that they don’t need to support their customers in any meaningful way. This isn’t the first time Google has proved shockingly absent with matters of support, but it feels very different when you’re purchasing a product subject to additional cancellation fees.

Further, it seems completely short-sighted to limit the subsidy as they have. Restricting the best price to new T-Mobile customers alone is frustrating, but they make it nearly impossible for anyone with a family plan to switch at the subsidized price. Worse, the subsidy at its lower rates really just amortizes the cost of the phone out over those two years, as the Even More plans cost $10/month more—that’s $240 over two years right there. Let’s be clear: At $379, you’re better off financially buying the unlocked phone and using the Even More Plus plan, which costs $10 less, for a total savings of $90 over the two year term. Even better since you’re not under any contract at the $529 rate.

Creating barriers to entry for new customers is always a bad idea, made all the worse when those barriers seem arbitrary and class-based. Google needs to stop with the silly tiers and subsidize the damn phone like they’re usually subsidized through carriers. They should allow purchases under family plans and not take the data plan into account. And they should allow you to select from any of T-Mobile’s Even More tiers, which would save me a phone call with T-Mobile’s (admittedly friendly and typically knowledgeable) support.

[1/18/2010 Edit: It was reported last week that Google is nixing the $379 rate entirely, so existing T-Mobile subscribers of all (out-of-contract) stripes will now qualify for the $279 offer. Early adopters who got hit with the $379 rate will have a refund check sent to them. Good on Google, but it'd be nice if it were $179 for all.]

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