Why is Google debuting its new modular smartphone in Puerto Rico?

Google’s Project Ara is a fascinating experiment in smartphone technology. Conceived inside the Google’s Advanced Technology and Projects group, Ara phones will be built of modular components. To upgrade, people wouldn’t chuck their old phones for new ones. They’d simply swap in a new piece. Google’s stated goal is to make it easier for entrepreneurs to enter the phone hardware market. If someone could build a better antenna, Ara could enable consumers to easily switch to it, without requiring the antenna maker to strike a deal with Apple, Samsung, or Xiaomi.

Work began on the project in spring of 2013, and it was announced later that year. Today, Google revealed the next step in its plans: Project Ara phones will enter their first market this year. That market? Puerto Rico.

Puerto Rico! The obvious question is: Why Puerto Rico?

First, there’s a nice competitive, complex market for cell service on the island. Puerto Rico has five major cell service providers. The two biggest are AT&T and Claro, a subsidiary of América Móvil, but there are three other providers, OpenMobile (which launched the first LTE network), T-Mobile, and Sprint.

Second, wired broadband penetration on the island is not that high, but mobile penetration is. Google says that 75 percent of Internet usage in Puerto Rico occurs via mobile device. So, in that sense, PR might more closely mirror the developing countries where it seems like Ara might have the most appeal.

Third, Puerto Rico’s airwaves are regulated by the Federal Communications Commission. So, Google can keep working with the agency on what it calls a “regulatory approach” to Ara. (We’ve asked Google how the rules in Puerto Rico differ from the mainland US such that they can launch in the U.S. territory.)

Put it all together, and Puerto Rico seems like the perfect test region: it’s close-to-home and both sort of like developing markets and sort of like the mainland U.S. market.