Google to Shift Nexus One Sales to Retailers, Cease Sales Online

For all the good and bad that has come along with the Nexus One, a chief complaint has been Google’s method of distributing the handset and its (lack of) customer support. While a few carriers (mostly in Europe) have teamed up with Google to offer the N1 subsidized and in store, the large majority of customers have only been able to purchase the phone unsubsidized and online, with no chance to try it out hands-on. Along with having to shell out over $500 to get their hands on the Nexus, customers were met with virtually no support when the inevitable problems started arising.

Google-Nexus-One-Android-22-Froyo-Korea

Today, Andy Rubin has announced that this will soon change. While he stresses that the Nexus One was an innovative pioneer handset that has spurred the advancement of mobile technology, he also admits that Google’s new distribution model wasn’t so successful, so Google will be shifting the focus away from themselves as the sole channel for device sales (a move echoed by their rumored team-up with Verizon on an Android tablet).

Rubin states that the process will be two-fold. First: get the Nexus One into more retail outlets on subsidized deals with wireless carriers (but not Verizon or Sprint, lest you forget). Second: end sales of the N1 through the Google Store, instead shifting it towards a portal showcasing the latest Android phones from all manufacturers and carriers.

And now we all can say it: FINALLY. The almost immediate response to Google’s initial plans for shaking up handset distribution were met with trepidation, and after those worries turned into reality we were left wondering how long until Google quit being stubborn and let go of their dreams of unlocked, unsubsidized phones at a hefty price tag.

While it remains to be seen just how much life the N1 has left in it with phones like the Droid Incredible, EVO 4G, and HTC Desire causing mass fan-gasms worldwide, at least we know if and when Google does decide to release a Nexus Two, it will be under the same old distribution model we are all used to and just plain happy with.

[via Google]

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  • Acer_Liquid_Owner

    Google should’ve subsidized it themselves. It was just too expensive compared to other phones. And every online distributor other than google sold it for even higher than the $529 price.

  • Dave

    So Apple’s model was right all along? Get the carriers to sell it in their stores (with subsidies, hopefully), but otherwise make sure they keep their grubby paws off.

    For me, the major appeal of the Nexus One (and the reason why I bought one) is that there’s no carrier crapware on it and no middleman to slow down the updates.

    Actually, I quite like the idea of having an unlocked phone and no contract, and I was able to use the bargaining power to shave a few bucks a month of my bill (I’m in Canada, where all three major carriers have compatible networks, so there really is some bargaining power). But if I’d had the option to buy it subsidized with a contract, I definitely would have given that some consideration.

    From what I’ve observed, most of the general public wouldn’t even think about buying an unsubsidized phone, so this can only help Google’s bottom line. But they better hurry up and get these things out there before the new iPhone releases!

  • Eric Heymann

    Finally!! Perhaps AT&T can get this phone for $179 and NOT mess with it at all. Ahh I can dream right?

  • honkahonka

    Too little too late. They really missed the boat on the Nexus One launch.

  • Dan

    I just wish they sold it through the carriers, but still kept an unlocked, unsubsidized phone on their website to purchase off of there. Especially here in Canada where we almost all of the time receive phones way after the Europe and the US, it was nice to finally have a phone at the same time as everyone else other than waiting months.

  • Jim

    Sure hope they have resoled all the problems with the Nexus One.

    http://www.google.com/support/forum/p/android/label?lid=4a96f6d473819af3&hl=en

  • swehes

    They learned from it. However I am with the other people. It is a nice piece of work as in other companies keep their bloatware of the phone. See. I can understand if people didn’t pay anything for the phone and the companies pull in money from their partners for having their crap on the phone. But T-mobile have it done right where if you are off the contract. You pay full price for the phone. And keep things off the phone that is not a part of the original Android OS.
     
    Yes. I am sending my evil glare to Samsung and their Yahoo deal.

  • Bobby J

    While I love my Nexus One and personally had no problems with the distribution model, this doesn’t surprise me one bit. Like people above me have said, I like not having any carrier branding or a contract, and it’s actually cheaper in the long run on T-Mobile’s month-to-month plans than if I had bought it subsidized, so I’d like to still have this kind of option available in the future.

    However, I don’t personally know anyone besides myself who has one, and pretty much everyone who sees mine is seeing it for the first time. Even when I went into T-Mobile to get it activated, it was the first time the employees there had seen one. Most people don’t read up on tech devices for weeks or months before they come out (or really much at all for that matter), and therefore need to be able to see and touch / play with a device before buying it. I feel like even if they had just had some units available in physical stores for people to see and try out, even if they still had to actually purchase them online, it would have worked better. I don’t think people are as opposed to the idea of buying a device unsubsidized as so many people seem to think, and so a hybrid approach could potentially be successful in the future.

  • Kastro

    We’re “just plain happy” with the current distribution method? You like 2 year contracts, carrier locked/specific phones and carriers purging features from the Android OS to replace them with their own?
    I’m still hoping this will change some day.

  • James

    I so wanted one but got the Cliq subsidized, had to get one for the wife one to and could not part with 1050 for 2. If I can pick it up at T-mobile soon I will be pissed that I did not wait 2 months longer so I could grab it subsidized on a family plan. N1 > Cliq by far

  • jdog

    @Jim No they haven’t its either you get lucky and get a unbroken phone or keep getting replacements until the phone works(took me 3). I have read over 2000 posts on the Nexus One forums and that seems to be the only solution that has worked. Even though I raised hell when my phone was messing up like 30 times a day and a thread I made was featured on all the major tech websites, there is no phone I would rather have than this one because no one can slow Google down when it comes to sending out updates. Bring on the Froyo baby :)

  • kilometers

    Glad to see they realized this. The N1 is a great phone and the friends I have showed it off to want one! If people could just play with it when they shop for phones in a store they would probably get one with a 2 year contract. Plus they could easily bring it to the store for exchange in case it has problems.

  • Hans

    I don’t get that, who wants to buy a subsidized phone if you have to sign up for 2 years and a ridiculous overprices plan? At least to me the way Google sold the N1 made much more sense.

  • Noah Y

    I gladly paid the $529 and wouldn’t have it any other way. The subsidized phone+contract model is strangling the mobile industry and no one even notices because it’s so pervasive.

  • fm78

    Crossing my fingers for a AT&T subsidized Nexus One.

  • Mike

    I think this ending this distribution model is a mistake. It shouldn’t be closed, just tweaked a bit. Google should partner with manufacturers to sell world band phones that can have both cdma and gsm capability. One could purchase a phone from the webstore unsubsidized and know that it will work with any carrier in the world. Other versions of the same phone with tailored radios should be sold in their respective stores. The phones sold in the store would be subsidized by the carrier. People could see them in person, get a feel for them and if they so desire, pay the full price from Google to get one that works with any carrier.

  • http://digitalflophouse.com/ Evan Kaufman

    As for “the same old distribution model we are all used to and just plain happy with”, speak for yourself…I’ve never been happy with the old distribution model.

    And, by the way, I am very happy with my unsubsidized Nexus One.

  • Isthmus

    The N1 is still a pretty damn good phone, but I can’t help but feel that this move is a bit of too little too late. There are simply better Android phones on the market now or very soon to come. Unless google plans on upgrading the hardware specs or advertising the hell out of this one, I just don’t see it being a major choice for folks relative to the competition.

    It would be nice to see it in an ATT store right next to an Iphone.

  • EvenMoreTruth

    The old 90′s distro model sucks! And shows how dumb MOST Americans are to want to have a phone on the cheap and get raped on the contracts/plans!

  • nom

    i bought mine unsubsidized online and i still prefer it that way but the ability to physically play with it in stores is also a must.

  • Craig

    It would have sold much better if there was one model that worked on 3G for both TMobile and AT&T. What’s the point of buying an unlocked phone in the US if you are stuck with your carrier anyways?

  • JB

    It is time for TMobile to now bring on the HTC Desire to the USA. Tons and tons of people want this phone and now the only reason NOT to have the phone- N1 situation with Google is now gone-0 So TMobile, bring on the HTC Desire to USA. It will sell like hotcakes!!!!

  • Steverino1

    –The online model worked for me, maybe not for others. In 10 or 12 months I’ll be $ ahead of the subsidized method due to my cheaper monthly rate. With subsidized phones you pay for the phone….forever….
    –Most phone consumers probably want the cheaper up-front price.
    –I agree with others, too bad both distrib. models can’t exist at the same time.
    After 4 months, I’m still in lust with my N1.
    Can’t wait for FROYO!

  • Daniel

    “While it remains to be seen just how much life the N1 has left in it with phones like the Droid Incredible, EVO 4G, and HTC Desire causing mass fan-gasms worldwide”

    What? They’re all the same phone, plus or minus the Sense UI! And as far as I’m concerned, I’ll take no Sense UI and an immediate update to Android 2.2 ;)

  • Ben Steel

    Noah…RIGHT ON
    besides won’t a vanilla phone, without the layers of UI’s from Verizon, Sprint, HTC, Samsung, etc be a lot easier to upgrade as newer versions of Android appear…?

  • Maj

    now that is fuckin great, just when i wanted to buy the phone :(

  • G1toN1

    project emerald anyone?!!!

  • going_home

    T-Mobile and AT&T will get it real quick I bet. I’d like one but I wouldnt get one from Google because of their lack of customer service. :D

  • asqwerth

    What about people from other countries? Surely they should keep the option open for us to order it online from them? Otherwise there’s no certainty the phone will ever come to carriers in our country. After reading about Froyo, I was thinking of ordering the Nexus One, because it would be yonks before the other phones – esp my Hero which hasn’t even got upgraded from 1.5 – get it. Argh.

  • Bob

    it is maybe because of this change that Erick Tseng left Google, after all google phone selling strategy was formulated by Erick Tseng

  • Brad

    I think shutting down their online store seems a bit extreme, but it needed to be sold in carrier stores as well. Otherwise, you just don’t get the marketing exposure necessary to move the product. People want to look at a phone in person and play with it first, before they blindly buy it. It’s a big purchase, with a considerable commitment. After all, this is the device they will use every day for the next two years, so they want to make sure they like what they buy. But, I’m guessing that it probably costs them too much to keep the online store going, with as few sales as it’s generating. That number would decline as well, once they start stocking them in retail stores.

  • Jason

    I think it would be better if they still sold the unsubsidized through the online store. Also, when is this happening? I can’t find even a tentative date.

  • bryan

    do you all forsee a difference (mainly software) between the nexus ones that were sold online and the new phones that will be sold in stores? i would like test one out in a store before buying it but if it eventually becomes a t-mobile version nexus, i’d better order an original before its no longer available online.

  • http://rohitprabhakar.com Rohit

    What I have learnt from this is that “Personal touch still matters!”. Even in this high tech world nothing can replace the need of touch, see and feel anything before buying. Surely I buy books online directly without even looking at it in the store. But for things like clothes everybody would really like to feel and see how it looks on him. For all electronics, nobody would love to buy anything before playing with it at a store.
    http://www.rohitprabhakar.com/2010/05/15/google-nexusone-goes-offline/

  • mihaelb

    I don’t see why the two are mutually-exclusive. Offer them, subsidized, through stores, and keep the online store available as well for people who don’t want branding/contracts?

    Also, I never had a problem with contacting customer service by email or talking to technical support on the phone (I got the phone about 3 months ago, so maybe that had been the case before then).

  • mike

    Guys in the end the UI stuff won’t matter after froyo. After the upgrade most other upgrades will be through the market. Ending this fragmentation issue. I like running stock android on my droid. But these companies have to be different. They all run android but they are trying to out sell each other. I just wish they didn’t sell out to yahoo because google programs are amazing and half the reason people buy these phones.

  • K

    It’s been said before and I’ll say it again.

    who wants to keep buying new phones every 2 year but with required plan upgrades tied to your access to the new models, in all their branded bloated glory?

    What if the N1 was really a proof-of-concept for Android’s potential, and a market stimulant for 1ghz processors and completely open phones?

  • pgib

    As long as an unlocked version remains available, it’s probably fine. Buying an unlocked phone and then picking a carrier (sans contract) should be the model going forward. This is already done in other parts of the world, Google is just one of the first to bring it to North America. The ability to switch carriers on a whim when they give you crappy service or when the other guys are offering a better deal is a very powerful thing. Enjoy your multi-year contracts, iPhone guys :)

  • Vlad

    The ability to touch the phone before buying it is just a lame excuse for the main reason – people in North America are just used to subsidized phone/contract model, although it’s much more expensive after all. This is another example of the level of hypocrisy of North American way of life – they preach about the free market, but the competition is just non-existent here. People are just brainwashed with a short-term monetary benefits, that they don’t realize: unlocked phones mean more competition amongst hardware manufacturers for the direct relationship with the consumer, and the lower phone service rates. How do you think Nokia built their trademark? Definitely not by signing an “exclusive” deal with a service provider.
    HOW DO YOU SAVE MONEY BY SPENDING???

  • coryc10

    They should have done this a week after launch. You can’t tell me they didn’t see this as a failure within a week. This idea was probably the worst, and greediest idea google has ever tried.

  • hazydave

    Google suggested they would change the distribution model, but then didn’t.

    Lots of phones are available without a contract. They’re not sold well that way, largely because of artificial pricing. Wireless carriers benefit greatly from contract lock-ins and the apparent “deal” that locked-in phones offer customers. So they negotiate their price as a discount from the retail price. This forces the retail price artificially high, and prevents customers from buying that way.

    If Google had been serious about changing the model, they would have driven the price way down. One example, the iPhone vs. iPod. Add about $40 worth of parts to an iPod Touch and you get an iPhone: cellular modem, microphone, camera, etc. Not a big difference. But even though the iPods sell, overpriced, in the $200-$300 range at retail, the MSRP on the iPhone starts at around $600. That price is completely unrelated to the actual cost difference, but directly related to the price AT&T is getting when they buy in million quantity from Apple.

    Google didn’t do this… they initially set a price a few bucks below the $599 MSRP of the Motorola Droid. That was not a game changer. Had they put it out for $300 or something similar, it might have done very differently.

    The other problem, of course, was Google’s ideal vs. reality in the market. You can’t effectively sell a phone that’s unbundled but will only work right on one vendor’s network.. the ultimate goal would need to be to foster competition. Unfortunately, the Nexus One only did the T-Mobile frequencies (1700MHz, 2100MHz) for HSPA (GSM’s G3 technology). A universal phone would need to support G3 on AT&T and in Europe as well.

  • Vince

    I had Tmobile and like the service. I wanted to see the Nexus One. No chance. They didnt have it in stores. If I wanted to see it, I had to wait for a sales associate who had to phone to come in later on in the day. Really? I cant even touch the phone. In addition, the Tmobile stores were ticked because they received no commission for sales. There was no support other than a website.

    I bought an Iphone and never looked back.