Thursday, December 8, 2011 at 7:46 pm.

Why Google is bending to Verizon over Google Wallet

Eric Schmidt and Lowell McAdamGoogle has complied, so far, with Verizon Wireless’s request to withhold the Google Wallet mobile payments service from the new Galaxy Nexus phone.


Because Verizon is a very important partner for Google: Its biggest Android customer in the country and maybe its most important in the world.

  • With 108 million wireless customers at the end of September, Verizon was the biggest U.S. wireless carrier, period.
  • About 38% of the 42 million Android subscribers in the U.S. are on Verizon, according to comScore data.
  • That’s about 1.8X the amount that Sprint, the next-biggest Android carrier, has.
  • Therefore, it would suck for Google if Verizon prioritized iOS and Windows Phone 7 over Android for whatever reason.

Google is also in the process of acquiring Motorola Mobility, whose biggest customer is — you guessed it — Verizon.

  • Verizon’s Droid lineup — mostly Motorola devices — put Android on the map and its campaign has been a big part of Android’s success. Many people call all Android phones “Droids” or “Droid phones”.
  • About 80% of the Android subscribers Motorola has in the U.S. are on Verizon, according to comScore data.
  • About half of Verizon’s Android subscribers are on Motorola devices, according to comScore data.
  • During 2010, Verizon represented 28% of all of Motorola Mobility’s net revenues, according to its year-end filing to the SEC. (Customers nos. 2-5 represented another 21% in total. So you can see that Verizon was a very strong no. 1.)
  • Google also probably wants Motorola’s set-top box division and Google’s video advertising division to sell into Verizon’s FiOS business. And to be on good terms with the cable companies, which just got in bed with Verizon.

See? It’s complicated. In the meantime, while Google Wallet is a solid bet for the future, it’s pretty much zero of Google’s business today.

So working with Verizon on this one, instead of trying to start a fight, seems to be the right move.

Earlier: Is Verizon even allowed to discriminate against NFC apps like Google Wallet?