Nexus One a Failed Experiment In Online Sales

shmG writes "The demise of the Google Nexus One phone is fairly straightforward: a lack of sales killed the product. While it will continue to sell through Vodafone in Europe, KT in Korea and a few others, the experiment of Google indicates that selling a phone direct to consumers online is dead. 'The bottom line is people like to look at phones in the store. Google has a lot to learn about phone sales, this is one lesson they learned.'"

Comments

Re:False

[MrEricSir]

But wireless contracts tend to be the same price whether you're paying off a loan or not; in other words, you're just wasting a lot of money if you didn't get a phone+contract from your carrier.

Re:False

[h4rr4r]

Not with T-Mobile. Go look at their site.

Re:False

[h4rr4r]

T-Mobile does give a discount for bringing your own phone. It is why once the contract on my droid I will be going that way. That and they have phones with unlocked bootloaders.

USA subsidising model

[DrYak]

To be more precise, it seem to be that the problem stems from how the subsidizing is done in the USA :
- Carrier get exclusitive arrangement on certain model.
- Said model is only available at their (physical or online) store
- The only way to get a subsidised phone is through these stores.

This pretty much fucks up the market, because you don't get a free choice of service provider and phone. You pick one and you'll be restricted for the other.
And a phone without an exclusivity contract has just no choice.

Contrast the situation in several European country (including Switzerland, for a precise example) :
- Service providers don't give a damn about exclusive phone models. They compete purely on services and data plans.
- Phones are available in various shops depending on what the store's suppliers has, not who has signed an exclusive contact with whom.
- Thus most major phone companies (Nokia, Motorola, SonyEricsson, Samsung) are available in most shops (mostly in brick and mortar shops)
- Some shops could even import less known brands (Palm, Google, the first Android based HTCs, etc.) (mostly imported in computer-parts shop and other shops for technically savvy people).
- Subsidising is done at the shop level : You subscribe to or extend a contract with the service provider of your choosing available in said shop, and the provider will give a rebate that you can redeem on any phone of your choosing (as long as the phone is also in this shop's catalog)..
- Phone and service aren't linked. Service providers don't give a damn on which phone you used their rebate, as long as you sign a contact with them.
- You can actually use the Phone with a different SIM or even offer it as a present to your significant other, etc. (no SIM lock).
- As long as you keep the contact for said duration the provider is happy, they'll only get annoyed if you cancel the contract prematurely (you'll have to reimburse a part of the phone depending on how early you cancel).

Results :
- Phones from big companies have all their chance.
- Phones from less known companies can still get sold in some quantities through smaller shop specialising into import from those compagnies.
- Service provider have to concentrate on providing good services, because that's the only criterium they compete on.
- No phone company can hope to get away with shitty service just because the sell some magic Jesus-phone. If the service sucks, the users will simply get the phone with another service provider.

Re:False

[JDS13]

I bought my Nexus One outright for $529 plus tax, and pay T-Mobile $60/month (plus $4 tax) for unlimited data, unlimited texts, unlimited night and weekend talk, and 500 prime time talk minutes/month. If I'd taken the subsidy and bought the phone for $179, then I'd have to pay $80/month for the same deal. Similar plans are at least $100/month on Verizon or ATT, and $80 on Sprint.

By foregoing the subsidy, I paid an extra $350 for the phone. But over 24 months, I save $20/month or $480, so (at 0% interest) I come out ahead by $130. Also, the phone is unlocked so I can pop in an ATT or European or Asian SIM card, and talk economically on the phone anywhere. And if I was unhappy, I could sell it on eBay.

But I'm not unhappy - it's a terrific phone at a great price.