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Nexus One a Failed Experiment In Online Sales

Posted by timothy on from the but-a-nice-phone dept.

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.'"

17 of 366 comments (clear)

  1. False by mark72005 · · Score: 5, Insightful

    The reason why the Nexus One failed is because it was so damned expensive out of pocket.

    1. Re:False by Anonymous Coward · · Score: 3, Insightful

      And when you bought it full MSRP without subsidy, there was little to no savings per carrier on your monthly bill.

    2. Re:False by Anonymous Coward · · Score: 5, Insightful

      Exactly. Plus, people shopping for an upgrade phone wouldn't see it on their phone company's website.

      Failures:
      1. Large upfront cost. Consumers don't think about future costs.
      2. Not shoved in your face. Consumers aren't smart enough to seek things out.
      3. Too many hoops. People had to do too much work if they wanted to get carrier subsidizing worked out.

    3. Re:False by mungtor · · Score: 4, Insightful

      The reason it seemed expensive is because you weren't paying off a loan with the remainder of your wireless contract. Considering that all smartphones are really just small computers, their prices are pretty much where they should be.

      The reasons behind the demise were probably a) some people can't do the math to figure out how much they're really paying for the phone, and b) others really like upgrading every 2 years to impress their friends.

    4. Re:False by DJ+Jones · · Score: 3, Insightful

      That and the fact that T-Mobile was the only reasonable carrier. What they failed to do was negotiate a contract with Verizon. I would have bought one in a heart beat if I didn't have to switch to T-mobile with minimal 3G coverage. Alas, such a deal wasn't favorable for Verizon who prefers to lock down all their hardware.

    5. Re:False by Lord+Byron+II · · Score: 4, Insightful

      The real problem was that nobody knew that it was available. It got plenty of attention on /. and other tech sites, but take an average Joe who owns a smart phone and I guarantee you that he's never heard of it.

    6. Re:False by arkane1234 · · Score: 5, Insightful

      I'm slumming on T-Mobile, and if this is slumming then call me homeless.
      Hella better than Verizon with customer service, features, and choices.
      The price is the reason I switched, and the rest sold me.

      --
      -- This space for lease, low setup fee, inquire within!
    7. Re:False by SighKoPath · · Score: 3, Insightful

      I don't know about the GP, but on my 400 minute voice, unlimited text/data plan with T-mobile, I'm paying $65.53/month after all taxes and fees (in MA) with no contract. Before taxes/fees, this plan is $60/month. The same plan when used with a subsidized phone has a pre-taxes/fees price of $80/month. So, over the course of a 2-year contract, the subsidized plan would have me paying an extra $480, plus however much taxes and fees work out to be on the extra 20/month. I've never seen that big of a discount when buying a subsidized phone, so I know what I'll be sticking with.

  2. Competition by orcateers · · Score: 5, Insightful

    Anyone else think that the Nexus One was a project designed to push Android adoption, and that Google's support for the hardware fell off because the rest of the Android hardware market bulked up sooner than they expected? it's an idea i've considered.

    1. Re:Competition by fishthegeek · · Score: 4, Insightful

      IMHO it was because the hardware that was available from the carriers was really anemic. I had a G1 and it was really slow, had little memory and frankly was ugly. The MyTouch wasn't much better. I bought the Nexus 1 about 3 weeks after release and I love the phone. I suspect that Google wasn't trying to push Android adoption as much as it was trying to push OEMS to elevate the quality of the hardware. Since the N1's release we have the Evo, Droid X, and the Vibrant to hold up as high quality phones.

      --
      load "$",8,1
  3. Lack of promotion? by MrEricSir · · Score: 5, Insightful

    I never saw the Nexus One promoted, nor a link to the store anywhere (except perhaps on Slashdot.) Google has used their pageviews to promote other products and services, for example their ads for Chrome.

    Could it be the reason Nexus One didn't succeed was simply a lack of promotion?

    --
    There's no -1 for "I don't get it."
    1. Re:Lack of promotion? by shadowrat · · Score: 3, Insightful

      Exactly. There's probably nothing wrong with selling a phone online. You just need to advertise it. The kindle is only available online (i think). It's an expensive tech toy that hasn't failed.

      Nobody outside of the geek crowd knew about the nexus 1. If a layperson did encounter one on the street, it likely wasn't a memorable experience.

      "you paid how much for that!? and it still doesn't have the cool animations the iphone has?!!"

      Good luck creating desire among the general public with talk of open development and how many IDEs you can use with android.

  4. Online isn't the problem, it's carrier subsidies by Andy+Dodd · · Score: 4, Insightful

    95%+ of the population doesn't have a problem with being locked into a contract for two years in order to save a few hundred on a phone, especially since no provider gives any significant plan discounts to those who "bring their own device" in the USA.

    So a non-subsidized phone is dead in the water from the beginning unless it offers something that's so unique as to be worth the price. (For me, if the N1 had a physical keyboard, I would have paid the money for it. Once they released the version that supported AT&T 3G, it was the only device that had a recent Android release on AT&T. However, it had no keyboard.)

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    retrorocket.o not found, launch anyway?
  5. Was it really a failure? by jpmorgan · · Score: 5, Insightful

    I guess that depends on what Google hoped to accomplish. From a pure sales perspective, the Nexus One didn't make a big dent in the market. But with Android, Google is trying something that Microsoft tried with WinMo, and failed at; one of the many reasons was stagnant, crappy and divergent hardware. I've never believed the purpose of the N1 was to sell a lot of phones... that was obvious from the selection of T-Mobile as the carrier... the purpose was to drive Android forward and keep it from falling into one of the traps WinMo fell into.

    So if you compare pre--N1 Android phones to phones in the post-N1 era, the difference is startling. Nexus One may have failed in sales, but it succeeded in pushing the ecosystem forward. And I suspect that's all Google ever really wanted.

  6. Fear, uncertainty, and doubt by adbge · · Score: 3, Insightful
    This article is a truly atrocious fluff piece. I would be better off reading my sister's blog.

    The demise of the Google Nexus One phone is fairly straightforward: a lack of sales killed the product.

    “The idea a year and a half ago was to do the Nexus One to try to move the phone platform hardware business forward. It clearly did. It was so successful, we didn't have to do a second one." Eric Schmidt, Google's CEO [1]

    Google has tried to paint the Nexus One experiment as a success because it helped build market presence for Android, its operating system.

    Clearly false, Google has painted the Nexus One as a success because it has dramatically pushed phone hardware forward. Whether phones as powerful as the EVO 4G and Droid X would be available without the Nexus One, I'll leave as an exercise for the reader.

    "I don't think they will (produce another phone)," Dulaney said. "Maybe when the market matures, like it did with personal computers, maybe then you'll see people buying phones off the internet. But right now people want to go in and see the devices."

    Google's CEO announced that they wouldn't be producing a "Nexus Two" three motherfucking weeks ago. Thanks for the completely unnecessary speculation, though. "I called up the board and said: 'Ok, it worked. Congratulations - we're stopping.'" [2]

    [1][2] Source: http://www.telegraph.co.uk/technology/google/7864223/Googles-Eric-Schmidt-You-can-trust-us-with-your-data.html

  7. Re: Slumming on AT&T by colinnwn · · Score: 3, Insightful

    If you ask me, the slum is AT&T. It is kinda like Wal-Mart, crappy service, most products are the same cost as any other retailer in their segment. T-Mobile is Costco. Great service, not found in as many places, but in all the major metro areas, and a lot of midsize ones too.

  8. n900 and carrier discount by Bruce+Perens · · Score: 4, Insightful

    I paid $500 for a Nokia n900 and get about $20 off my monthly t-mobile payment vs. what I would have paid with a subsidized phone. It evens out in the length of the two-year contract for a subsidized phone. And meanwhile I can plug in foreign SIMs when I go overseas, so I don't have to carry a separate unlocked phone. And could I really have resisted a phone that can run a full Debian distribution in a chroot while it also runs its own, mostly Open Source, non-Java, platform?

    But I'm not the normal consumer, am I?

    --
    Bruce Perens.