Google Changes Its Nexus One Strategy

By May 14, 2010

Google announced today that it will be phasing out its online store for its proprietary mobile phone the Nexus One, which runs their mobile OS Android. Once the company establishes a more traditional relationship with national mo

bile plan carriers as it is currently doing in Europe, it will transform the current store into a "an online store window to showcase a variety of Android phones available globally."

The innovative move was meant to normalize the practice of consumers purchasing un-subsidized handsets, whereas the vast majority of cell phone users now pay a fraction of the cost of an actual phone with the agreement of a two-year contract with the carrier that they purchased the phone from. GigaOm describes that move as follows: "What was once a cannon shot across the bows of the U.S. carriers meant to change the way consumers purchase phones is now a small rubber bullet falling short of its target."

Andy Rubin explains in the Google blog post that sales of the Nexus One have not been as impressive as they had hoped. He clarifies that another benefit from releasing the phone in this way was to raise the bar on currently available handsets that run Android, such as the HTC Evo 4G on the Sprint network and the Droid Incredible on Verizon.

But the extreme disparity in numbers that The Next Web reports based on Flurry Analytics numbers shows how other problems may have been present in their product plan: In the first 74 days of its release (the number of days it took for the iPhone to sell one million units), the Droid outsold the iPhone by 50,000 units. The Nexus One sold 135,000 units in the same number of days.

Between lack of marketing, that the customers want to handle a phone in person and not pay full price for a phone, this was a less than perfect strategy from Google.

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