Here is another way to measure the carriers' pain. The Samsung Galaxy Nexus. Yours for $395, cash. No phone contract necessary. With a calling plan, this might be a $199 phone. (Verizon marks it up, calls it a $649 phone in order to make that $199 price look better.)
But is it a phone at all? Google (NASDAQ:GOOG) is selling the phone directly from its Google Play site. This is its all-in-one sales site for digital files. If you own an Android phone, the site already knows all the apps you have installed.
The point is, as I've noted here many times, a smartphone like the iPhone, the Android, or the Windows Phone isn't really a phone at all. It's a hand-held Internet client. And you can use an Internet client in your home, or most coffee shops, simply by turning on the WiFi. You only need a calling plan when you're calling.
With the Nexus Prime it's easy to swap-out phone company SIM cards. Mix-and-match GSM networks based on your criteria. It comes with Google Wallet installed. The head of digital content notes that it is "a great endpoint for Google services."
To quote an old wives tale, a smartphone needs a carrier like a fish needs a bicycle.
With Nexus Prime Google has a way to demonstrate an all-Google experience, without interference from manufacturers or carriers. It can establish a base, and users can compare that base with what carriers offer. This is how it takes back some of the control lost to carriers over the last two years, as it fought for market share against the iPhone.
Critics, who insist carriers are essential to any online experience, will note that Google tried to sell phones directly, without contracts, and failed in 2010. The point here isn't the number of phones Google sells. It's the marker Google places, the demonstration of exactly how much, and how little, carriers are needed in a smartphone experience.
Smells like a short opportunity to me. What do you think?
Disclosure: I am long GOOG.