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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?
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.
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
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 $500 savings justified the cost of the Nexus. The girls love their MyTouch devices, and the Nexus is probably the best phone I've ever owned. I've already rooted and modded it. Buying it unlocked was a plus, especially when I traveled to Europe a few weeks ago: slip in a local SIM and off I went.
Perhaps I'm fortunate in that buying the phone at full price is something I can do, but the sales model is something that makes sense. I can see this becoming more common in the future: manufacturers create the devices, make them workable on multiple carriers (especially for data between AT&T and T-Mobile in the US), sell them unlocked and let people just pick a carrier and buy a plan.
Then again, I know what I want. I don't necessarily need to touch something to see it's value.
Joe Dougherty, Florida, USA
The words I thought I brought, I left behind. So, never mind.
If you ask me, the slum is AT&T. It is kinda like Wal-Mart, crappy service, most products are the same cost as any other retailer in their segment. T-Mobile is Costco. Great service, not found in as many places, but in all the major metro areas, and a lot of midsize ones too.
Sorry for the uppercase, but this is infuriating: the Google online store was actively refusing to sell the damn phone to more than 95% of the world population!
There are tutorials all over the internet in all kind of languages with complicated and costly (more than US$ 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.