Print 34 comment(s) - last by MojoMan.. on May 17 at 8:59 AM

Google admits that its Nexus One is a bit of a failure, so it's revamping its sales strategy.
Google's favored Android child isn't living up to its potential

Google's Nexus One looked to follow in the success of Motorola's Droid (Milestone) Android smartphone.  It brought slightly improved hardware (courtesy of hardware partner HTC), special software attention from Google, and the possibility of picking from a variety of carriers.

Sales of the Nexus One were conducted exclusively through a new web store – and sales weren't very good.  In fact, Google as of March was estimated to have moved a mere 135,000 units in the three months since its January launch.

Now, as potentially superior competitors like the HTC Incredible (Verizon) and HTC EVO 4G (Sprint) storm the market, Google admits that choosing to sell the phone online was a mistake.  In a blog post, Google writes:

But, as with every innovation, some parts worked better than others. While the global adoption of the Android platform has exceeded our expectations, the web store has not. It’s remained a niche channel for early adopters, but it’s clear that many customers like a hands-on experience before buying a phone, and they also want a wide range of service plans to chose from. 

Google says that as a result of this realization, it will be phasing out the web store and trying to get retailers to sell the phone, which is currently available for AT&T and T-Mobile in the U.S.

Sprint announced on May 10 that it would not be carrying the Nexus One, despite earlier announcements that it 
would be carrying the device.  Along with Verizon's announcement that the phone is not coming to its network, it looks like the possibility of a CDMA Nexus One release may be dead.

No retailers have been announced yet, but likely candidates include Best Buy and Walmart.  Walmart back in January accidentally posted the phone on their site, but then stated that they had no plans to sell it.  

Despite the Nexus One's disappointing sales, the phone does have some fans.  Linux founder Linus Torvalds loves the phone and says that its the first smartphone he finds to be tolerable.  Hardware-wise it might not be 
the best, but it's still one of the best Android handsets on the market.

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I hope moving to retail includes a price drop....
By Smartless on 5/14/2010 2:55:01 PM , Rating: 5
Honestly, the webstore wouldn't have been that much of a failure if the phone didn't cost two & half subsidized phones. Yes yes unlocked and no crappy manufacturer UI is awe-waitforit-some but really. In this day and age, with good netbooks for $400, new and better smartphones released every 6 months, and wi-fi spots everywhere, isn't paying $530 for a phone a bit much?

By mavricxx on 5/14/2010 3:07:44 PM , Rating: 3
It's not when the rest of the world is on this pay for an unlocked phone, plus an unlocked phone is better cause you can switch carrier if you so desire. I'd rather pay for an unlocked phone than a locked stripped down version.

By erple2 on 5/14/2010 4:26:31 PM , Rating: 4
You and the other 134999 customers agree. However, the millions of others don't think that's an issue.

By cmdrdredd on 5/16/2010 1:24:12 AM , Rating: 2
It's not when the rest of the world is on this pay for an unlocked phone, plus an unlocked phone is better cause you can switch carrier if you so desire. I'd rather pay for an unlocked phone than a locked stripped down version.

Here's the problem. You have one phone for Verizon, another for t-Mobile and AT&T. That means you can't just change to another provider at the drop of a hat. Plus, the phone is only subsidized through T-Mobile which is much worse than either AT&T or Verizon in many areas. Now, if you have AT&T why not just get a subsidized an iPhone for $199? Or on Verizon one of the other Drioid phones for much less cash? Oh sure you can argue this is a better device but lets face it. To the consumer, cost wins. If I can get something that does similar or same function for cheaper then I will do it. There's times when you want something for prestige or "bling" factor, but the majority of consumers buy based on price more often than not.

By Navier on 5/14/2010 3:46:44 PM , Rating: 4
Having the option to buy an unlocked phone is not what stopped me from using the website to purchase the phone, it is the lack of a hands on experience. If the NexusOne was also available in retail store I could check it out and then purchase it online if it offered some intensive... such as price. Otherwise why give up the brick and mortar easy return ability?

Also having more than one carrier subsidizing the pricing would of helped those of us not on T-Mobile. They should not have released it until they had all major carriers on board.

By weskurtz0081 on 5/14/2010 4:42:17 PM , Rating: 4
There's nothing immoral about looking at something in a store and then buying it online. Maybe the stores need to change their business model to meet the consumer, rather than consumers changing behavior to meet the business model.

By freeagle on 5/14/2010 7:13:09 PM , Rating: 4
Dude, don't ever run a store. Stores are here for customers, not customers for stores. Despite the indication that the average person is... simple, he will always try to find a way to spend less and get more. It's nature given, everything works that way

By bigboxes on 5/14/2010 10:35:05 PM , Rating: 2
You are one big nutjob. Seriously, what gives you the right to tell me that I can't look at a product in a store and then purchase the product at the cheapest price, whether that be online or another b&m competitor? What, are you a communist? As for the ads I don't see any ads. If that bothers you then by all means please sign up for extra spam and take my share. Your sense outrage is totally out of whack. What is wrong with YOUR values?

By Bateluer on 5/14/2010 11:03:58 PM , Rating: 3
Your posts read like they were written by a teenage child.

I routinely look at merchandise in stores only to buy online later. There is nothing wrong with consumers going where they get the best deal. If the B&M store employees treat me well, answer my questions, are friendly, etc, there's a good chance that I may purchase the merchandise there. But its my choice, there's nothing sleazy about it.

I'm not sure you have a grasp on economics and capitalism.

By Quadrillity on 5/15/2010 9:42:52 PM , Rating: 2
I'm not sure you have a grasp on economics and capitalism.

So I guess he's right on par with Obama, his administration, and most of the wall street executives right? haha

By semiconshawn on 5/16/2010 12:15:12 AM , Rating: 1
Dont drink and post.

By MojoMan on 5/17/2010 8:59:11 AM , Rating: 2
My thoughts exactly. This dude is drunk or high. Move along folks... Pay no attention to the troll.

How about these problems?
By Fox5 on 5/14/2010 11:23:38 PM , Rating: 2
1. The phone wasn't available for upgrades on a family plan, only individual plans.

2. It was sold ONLY through the Google website. Even those that don't care about the 'in-store experience' would probably still prefer to go through tmobile's store for their upgrades.

3. Very few people buy unsubsidized phones, especially when you'll receive little support for it. Still, with all the people running jailbroken iphones, it shouldn't be that big of a problem, but the idea is pretty foreign to the market. Most of the people I told I bought an unsubsidized phone thought I was crazy for spending so much, and couldn't really grasp my claims that it's cheaper in the long run thanks to not having to get the smart phone data plan, or any data plan if I so choose, plus tmobile's cheaper plan pricing for unsubsidized phones.

4. There were some sketchy problems with refunds and pricing early on. Also, a lack of support from google and tmobile gave it a bad rep.

5. Hardware problems (poor reception, slightly blurry screen, high failure rate, poor touch screen) were well known early on. They'd probably had been acceptable, had there not already been comparable phones with less problems (droid, iphone) and better phones launched soon afterwards.

RE: How about these problems?
By Fox5 on 5/14/2010 11:25:29 PM , Rating: 2
Oh and 6 and 7:
6. Google's store website's minimalistic look comes off as sketchy.

7. For what google was trying to do, there's no reason they shouldn't have launched with 1 phone supporting at least tmobile and att, and preferably all 4 major carriers. If not that, then at least 1 GSM version and 1 CDMA version, launched simultaneously.

RE: How about these problems?
By Lazarus Dark on 5/16/2010 2:48:26 AM , Rating: 2
8. everyone I know is abandoning att in droves. Anyone getting a high end phone is going Verizon and anyone I know looking for the cheapest phone possible is getting those pay-per-minute phones. I might have considered the nexus if it was available for Verizon.

RE: How about these problems?
By Alexstarfire on 5/15/2010 9:13:45 AM , Rating: 2
I never heard of hardware problems with the Nexus One.

RE: How about these problems?
By theapparition on 5/15/2010 9:24:46 AM , Rating: 2
Do a little more reading.

The 3G reception under Tmobile was infamous.

RE: How about these problems?
By Alexstarfire on 5/15/2010 1:31:55 PM , Rating: 2
One carrier does not equal hardware problems.

too late
By Jeffk464 on 5/14/2010 6:20:44 PM , Rating: 2
Too little to late, the HTC incredible is a better phone and its on verizon. Why would anyone bother with the nexus one. I love my incredible the only thing is I will have it for about a year after verizon rolls out 4g.

RE: too late
By seamonkey79 on 5/15/2010 9:16:25 AM , Rating: 2
They have annual upgrades that run you $20 more than the New Every Two... at least, they did for me. I bought an Env2 last January and just ordered my Incredible for the same $300-100 subsidized rate, with $20 thrown on top of it.

RE: too late
By DanNeely on 5/15/2010 6:24:24 PM , Rating: 2
The obvious place for google to start shopping this phone is to all the small local/regional wireless providers. They've been complaining for years that exclusivity agreements are screwing them because they can't get any mid/high end phones and instead are only able to get cheap junk models. Google clearly doesn't have an exclusive agreement with T-Mobile because they've tried to shop it to Verizon/Sprint both of which declined because they had newer Android devices in the pipeline. Companies that don't have any high end smart phones available OTOH should jump at the opportunity to get a model that's only a few months old.

makes sense
By Paulywogstew on 5/14/2010 3:32:40 PM , Rating: 2
I wanted up upgrade to this phone from my G1. But since I still got 7 months till I'm eligible for a full upgrade I would have to pay full price to get this phone so no thanks. Now if they offered it in T-Mobiles store I would be eligible for a early upgrade which would subsidize the phone somewhat so if they can get this into T-mobile and soon cuz I'm about to switch to sprint for the HTC 4G EVO.

Unlocked, but frequency limited
By Devenish on 5/14/2010 3:54:44 PM , Rating: 2
It might have been unlocked, but you were still carrier limited in your own region.

The obstacle I faced is if you are going to pay full price for an unlocked phone it should support multiple HSDPA 3G frequencies as apposed to having two separate phones for AT&T/T-Mobile, throw in CDMA on top (See Strom2) and it’s a winner.

The day consumers phones can truly move between networks, competition will actually begin to compete for your money.

Well, duh
By bug77 on 5/14/2010 5:17:32 PM , Rating: 2
I've been wanting to get one of these since day 1, but Google keeps telling me "not available in your country or region". So yes, I'm shocked it didn't sell well.

Rather unfortunate...
By wuZheng on 5/14/2010 6:40:49 PM , Rating: 2
Google was on to something by proposing that maybe consumers should choose the device first, then choose their desired service. I guess this doesn't fly too well with the carriers that have been working on the ancient concept of using unique handsets as an incentive to become a subscriber. That business model is old and totally not suitable in an environment where the consumer theoretically has almost unlimited choice in handset selection, but is artificially constrained by this mass collusion of almost every North American provider.

I wonder if anybody else will be brave enough to try this idea again sometime in the future?

On a lighter note... I have a pre-carrier-distributed Nexus One, I'm going to believe that it is now a collector's item.

Front Facing Camera
By hiscross on 5/14/2010 7:34:57 PM , Rating: 2
That front facing must have gone off and killed NexusOne. Ain't easy building your own phone and trying to get people to buy it. Looks like multitasking Andriod only sells on cheap hardware. Gee who would have thought using the Microsoft model of building and selling crap would have been profitable? Seemed to work for Compaq and IBM. Oh wait...

It doesn't have a keyboard
By Yawgm0th on 5/14/10, Rating: -1
RE: It doesn't have a keyboard
By Yawgm0th on 5/14/2010 3:14:05 PM , Rating: 2

It costs more than better and similar phones from Apple, RIM, Palm and more than better Android phones. /article conversation

RE: It doesn't have a keyboard
By corduroygt on 5/14/2010 3:15:45 PM , Rating: 5
That doesn't explain the lack of sales

iphone and many android phones are selling well without a physical keyboard.

RE: It doesn't have a keyboard
By Bateluer on 5/14/2010 11:49:50 PM , Rating: 2
The N1 didn't have any kind of real marketing push, the way Verizon has pushed their Droid line up and Apple advertised the iPhone. Comparatively, the N1 barely had a peep.

I'm not opposed to Google making their 'own' phones, but I think the develop of the Android OS should be their priority.

But yes, any smart phone I buy must include a real keyboard. So hopefully, in 15 months when the time comes to replace my Moto Droid, I'll have some options.

RE: It doesn't have a keyboard
By seamonkey79 on 5/15/2010 9:20:24 AM , Rating: 2
If the Droid's keyboard wasn't a pile of pooh, I'd agree with you. I had an Eris and tested the Droid and found that the Eris was easier to type on (even with the input lag) than the Droid's keyboard was, because that flat grid layout is a joke.

That being said, I know two people who have Droid's. One uses the keyboard exclusively and can't use the onscreen worth squat, the other was wondering why they bothered putting the physical with the phone when the onscreen was so much nicer to use. Father and son, respectively. So, matters of preference, I suppose :-)

RE: It doesn't have a keyboard
By Bateluer on 5/16/2010 10:03:33 PM , Rating: 2
Keep in mind that there are two types of keyboards out there for the Moto Droids. One is completely flat, the other has keys with a slight bevel. Mine has the bevels, as does one of my friends. I also know two people who bought in the last month that have completely flat keys.

It took a little getting used to, coming from my Env2, but I'd wager I can type faster with the real keyboard on my Droid than anyone can with on screen keyboard.

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