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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.'"
The reason why the Nexus One failed is because it was so damned expensive out of pocket.
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.
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."
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.)
retrorocket.o not found, launch anyway?
The reason it failed is likely a lack of marketing. That, and it was rather expensive. And it wasn't even possible to use it in some places because you need to buy a phone from your operator, right?
Anyway, hasn't this exact story been posted several times on Slashdot? This is definitely not the first "Nexus One failed" post. Why do we keep discussing it? Time to move on, perhaps?
Clever signature text goes here.
That's a whole lot of confusions, based on one case study. I'm not saying they're wrong, just that we need more data for these findings to be convincing. I'm always dubious of analysts selling opinions as facts. This is editorial, not news.
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.
but they have been conditioned by expert marketing to view what they can afford by monthly costs. A phone contract looks less painful when you say $50 a month instead of $600 a year. People are made poor by the multitude of 'monthlies' they pay for. For many the cost difference between a contract and no contract is a wash.
Lets not forget one other issue besides price, better phones were not far behind coming out, not only technically better but marketed better.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
I think it's rather silly to flatly state that selling phones direct to consumers is "dead." Just because Google didn't out sell the iphone, or push millions of units doesn't make direct-to-consumer sales dead. It just means that if you want to sell lots of phones direct to consumers, there are many lessons to be learned from Googles experiment.
I bought a Nexus One unsubsidized because Apple and AT&T refused to unlock my paid-for iPhone. I just moved out of the US and wasn't willing to pay literally hundreds of dollars per month to keep my phone tied to AT&T. Now, here in Norway I pay around $30 USD for the same basic service I was paying AT&T $85/mo for in the US. Sure I don't have the unlimited data that I had in the US, but 250MB/mo is enough for me and I can always buy more if I need it. At least I'm not paying the subsidy price forever like most US phone users.
I don't know if the average person really puts much thought into what they are paying for in a phone contract, but there will always be a market for users that want some more choice in their contract. It doesn't look like anyone is going to swoop in to fill the N1 market for the time being, but that doesn't mean that selling phones directly to consumers is "dead." It just means that no one has found the right way to do it and be profitable yet.
This one's tricky. You have to use imaginary numbers, like eleventeen... --Hobbes
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.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
TMobile's unlimited everything no-contract plan was $20/month cheaper than the subsidized plans, making the unsubsidized N1 cheaper than one under contract over 2 years.
"Upon attaching the waterblock to my penis, I began to notice that I know nothing about computers." -- JRockway
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
Look, I was up for a new phone this summer (AT&T isn't going to cut me a break on my rates, so I'm going to get a new fucking phone every 18 months, even if that means I immediately flip it on eBay). WinMo is no longer viable - there are android and iphone apps for everything the WinMos had a lock on two years ago, and I wanted a finger interface. W7 will not be ready in time.
I considered both android and iPhone, and did a bunch of research on them. For all the limitations of the iPhone, none of them mattered to me that much. I would miss tethering, but I only used it 4-6 times per year. The Nexus One was intriguing, but - by Android users own admissions it fell short. The touchscreen was inferior to the iPhone (a big point of contention with my old WM, and one of the things I really liked on my wife's iPhone). A standout feature was the notification light...but it didn't work as planned, and Google appeared to have abandoned ever making work. And, honestly, I couldn't play with one before stroking a check for $600.
I got an iPhone 3, liked it, and upgraded to a 4 for the speed and camera (which is very good, btw). Sold the 3 for within $20 of what I paid. Now, I'm not very happy with the 4, or Apple in general, since the 4.0.1 update bricked my phone and Apple had no answer on how to fix it. Thank goodness for mac hackers or I'd be at an AT&T store asking them to replace my !@#$ @#$#% phone with something that worked. I shouldn't have to troll the mac equivalent of XDA to get my never-jailbroken, never-hacked iPhone to do a simple update.
I'm still in the market, but AT&T android handsets are crippled, the new Moto android handsets are hobbled and Verizon wants $30 more poer month for their service (which is no better than AT&T near me), and everyone else coverage makes AT&T's map look continuous. The Nexus was nice, but now it's gone, and there's no push to get a better android phone, just a fatter spec sheet. I was hoping a N-2 might be in the offing, and a real phone shootout would ensue in my house. Guess not.
Is it just my observation, or are there way too many stupid people in the world?
I began considering the Nexus when Google first introduced it. Like most others, I was unsure because of the $529 price tag. My wife and daughter were also in the market for new phones. Having already owned an HTC G1, the question of Android performance was never an issue (I paid full price for that phone, too).
The issue for me was contracts. My contract with T-Mobile had expired, and I wasn't willing to lock into another one. T-Mobile had also just introduced some new no-contract plans, so I did some math.
I ran the numbers for getting a two-year contract with two new MyTouch 3Gs at the $149 subsidized price. I wanted an unlimited everything plan. Then I looked at the same idea, only I'd buy the MyTouch phones at retail ($399 each). with their no-contract Even More Plus plan. Over the course of the same two years, I would pay $500 *less* for the phones and the service, without a lock-in. Not only that, T-Mobile made me a great offer: if I purchased the phones in a retail store, I could pay $20 down on each, plus the sales tax (about $50 total for both phones), and then pay the phones off at $20 per month each, added to my bill, with no interest. I could pay off the phones at any time.
That $500 savings justified the cost of the Nexus. The girls love their MyTouch devices, and the Nexus is probably the best phone I've ever owned. I've already rooted and modded it. Buying it unlocked was a plus, especially when I traveled to Europe a few weeks ago: slip in a local SIM and off I went.
Perhaps I'm fortunate in that buying the phone at full price is something I can do, but the sales model is something that makes sense. I can see this becoming more common in the future: manufacturers create the devices, make them workable on multiple carriers (especially for data between AT&T and T-Mobile in the US), sell them unlocked and let people just pick a carrier and buy a plan.
Then again, I know what I want. I don't necessarily need to touch something to see it's value.
Joe Dougherty, Florida, USA
The words I thought I brought, I left behind. So, never mind.
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.
in the us may be.
in europe it is very different. i haven't bought a subsidised phone since the n70 in 2005. the crapware loaded on that by vodafone that was unremoveable made be buy all phones after that sim free.
wasn't much of a change for me as i use all my phones on prepay so the price went up around 100. i even bought an iphone 3g on prepay. 630 if i remember rightly. when i go to a linux potd meeting i reckon 90% of the mobiles there are sim free. less hassle. you're dealing with fewer companies to get your device.
when nokia announced the n97 and it was looking initially like it would cost 700 most of my friends and mates were still interested. most didn't end up buying it as it was junk when it was released.
so i spent 400 on my htc hero and spend about 5 a month on credit. most of my data is on wifi when i'm at work, home or most of the locations i meet up with others so i only pay for a tiny amount of data.
the nexus one to me was of no interest as i want my next android phone to have a real keyboard (the htc hero was the cheapest android device i could find to test how i would like android). just a pity that motorola removed themselves from that list with the efuse debacle. htc removed themselves when they started paying ms royalties for every android device sold.
Sorry for the uppercase, but this is infuriating: the Google online store was actively refusing to sell the damn phone to more than 95% of the world population!
There are tutorials all over the internet in all kind of languages with complicated and costly (more than US$ 100 on top of the official price) procedures to buy the Nexus One outside the US.
The thing has been available in Europe only after six months and has been frequently sold out for weeks in both stores and online stores. See e.g. the difficulties to buy it in the UK, France, Italy, eastern Europe, etc. from May to the beginning of July.
I've been trying to buy it (from Italy) for months and I've finally found one only three weeks ago thanks to a post on a forum that tipped the right store that had one available.
So before jumping to wrong conclusion, please try to avoid blocking more than 95% of the world population from your store (no jokes about starving African kids, please: Africa is less than 15% of the world population, and not everyone there is busy dying anyway). And keep in mind that people from Europe and some Asian countries get much better than the average American what these thing can do (the first thing I did with mine is installing bash and Python; and, yes, a powerful always-on pocket computer with GPS, constant internet access, camera and all kind of sensors can be programmed to do lots of new unusual useful things).
There's a hidden treasure in Python 3.x: __prepare__()
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.