Google Stops Selling Its Own Phone

Dave Knott notes that Google has announced it will close its online cell phone store and no longer sell the Nexus One smartphone directly to consumers. "While the global adoption of the Android platform has exceeded our expectations, the web store has not," wrote Andy Rubin, a Google vice president of engineering, on the official company blog. "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." From the Globe and Mail article: "At least one aspect of Google's attempt to disrupt the world of mobile communications — selling phones directly to customers — has failed. ... [T]he decision to design and sell the Nexus One was perhaps more potentially disruptive for carriers. ... Google plans to continue marketing the Nexus One through 'existing retail channels, essentially partnering with carriers around the world. The Nexus One web store, meanwhile, will essentially become a marketing portal 'to showcase a variety of Android phones available globally.'"

Comments

It never should have sold one in the first place

[dougluce]

Qualcomm, Motorola, and others learned this for them already. If you've got something amazing to provide to the cell phone value stream, keep away from competing with those you are helping.

The carriers have won.

[jacks smirking reven]

They've got the majority of America buying into the subsidy/contract system. The advantages of dropping $500 upfront on a phone aren't obvious to the layman phone buyer. Not when they get get an iPhone for $199 (despite the savings over time of going off contract).

People here know the advantages (and a few here probably bought the N1 from Google) but I think that mindset is going to be hard to change without a drastic drop in the initial cost of the hardware.

Re:The carriers have won.

[Nerdfest]

If I ran the country (and I really think I should), carriers would not be allowed to bundle the phones. They can sell them with a monthly payment, but it must be separate from the cost of the plan, and in no way affect it. Bundling phones and locking people into long term plans discourages competition in a huge way. I'd like to see the carriers fighting for my business on a monthly basis, not every 2 or 3 years.

Re:The carriers have won.

[teg]

If I ran the country (and I really think I should), carriers would not be allowed to bundle the phones.

Norway has a mobile market that works a lot better than the US, and here are a couple of key reasons why:

• One common standard - GSM. This ensures competition, because a phone is compatible with all mobile operators. Thus, you get plans with and without subsidies ("bring your own phone"). In the US, you have different standards which makes switching operators harder
• After the carrier subsidy period is over, they are mandated by law to unlock your phone if you ask. The phone is yours, you paid for it.
• For consumers, the maximum contract length is 12 months. For businesses, 24 months. This typically means that the monthly rate go down after this period, as you could unlock it and leave otherwise
• There also has to be a possibility for the customer to terminate this contract earlier, by paying a prorated fee.
• You have plenty of Mobile Virtual Network Operators, which increases the competition. As a condition of using a limited, public resource the mobile network operators have to accommodate them.

Competition is good, but sometimes you need to regulate to ensure a free market.

Re:While android is leading iphone

[the_womble]

The cellphone vendors will also be far happier to use Android if Google is not competing with them.

Re:Google never stopped selling it's own phone...

[catbutt]

Although you could say the same about the iPhone and Apple, since FoxConn manufactures that (and lots of other companies make the various components).

Google had significant design and engineering input into Nexxus One -- probably not as much as Apple has over iPhone, but still. Many if not most American tech companies outsource their manufacturing. If Google determines the specs and puts its brand on Nexxus One, in many senses that makes it "it's own" phone.

This is why

[Gunegune]

"Brick and Mortar" stores aren't going anywhere anytime soon. While there are many people who make almost all their purchases from online retailers, I find that most people would rather go to a B&M store for a purchase.

All of my friends and relatives make their purchases at B&M stores because they don't have to wait or pay for shipping, they can physically "preview" their purchase, they can pay in cash instead of a paying with a credit/debit card, and it's far easier to make a return on an item. The only reason I've known them to make an online purchase is for a SIGNIFICANT discount (books, hardware, etc.), though, many B&M stores have become very competitive with online retailers.

NOTE: I am referring to the purchase of physical items in my comment. Most of my friends make software purchases online (i.e. Steam).

Not a failure in one aspect: Unlocked

[Rog7]

As a high-profile unlocked phone, the Nexus One has seemed to have had an effect on carriers here in Canada.

Bell, Telus and Rogers have all been friendly about just putting a SIM card into the Nexus One and using it. I don't know if it's been an official policy at these carriers or not, but previously getting an unlocked phone onto anything but prepaid has been a pain, I was often met with resistance at the stores ("Oh no, you can't do that").

Now, even with other unlocked phones, the stores have been a lot more receptive about getting you on their network.

It may not have sold in spectacular numbers and many consumers have no clue it exists, but the reps in the stores know this phone very well.

Re:Nice try

[mrops]

Thats because you are looking for a phone.

Nexus One is in the category I like calling "Also a phone".

If you want a phone go look for a Nokia 6120 or something. Mind you 6120 is more than phone too.

With data usage on these mobile devices becoming more and more common, these things are more of an internet tablet with voice capability (vs the other way round).