By 
Simply posing the question of whether or not the Nexus One is a good thing or bad thing for Google is bound to spark furious debate. You’ve got the issues of them stepping on the toes of their partners, problem of furthering the iPhone vs. gPhone argument, claiming they’re furthering fragmentation, raising the question of Android’s openness and yada yada yada.
But ask yourself this: going by pure sales, how many units does Google need to sell in order to consider the Nexus One a success. By Andy Rubin’s own count they only expect/hope the Nexus One will sell a minimum of 150,000 units altogether. That is a modest amount by any stretch of the imagination, considering this is the first phone announced by Google.
But it isn’t a “gPhone” and I think that’s the misconception in most cases. But misconception or not – I’m blown away by the numbers being thrown around and the opinions attached to those numbers.
Doug Anmuth from Barclays Capital estimated 5-6 million Nexus One phones would be sold in 2010. That’s a lot if you ask me… and John P. from the WSJ seemed to agree. But after first week sales were estimated at only 20,000, Citi released a downgraded sales estimate of only 2-3 million Nexus Ones sales in 2010 which they called modest.
ONLY 2-3 million? That’s a lot if you ask me. But comparing it to some of the other smartphone powerhouses it sure as heck doesn’t seem like a lot:
The counter argument is that Google didn’t aim to release a phone that blew everything else out of the water, but instead introduce a new distribution concept to change the course the current industry has taken. That’s all fine and dandy but in my humble opinion, Google should have done a bit more.
I think the Nexus One is probably the best phone on the market – you can make an argument for or against the iPhone but in the end that comes down to preference. My problem is that the Nexus One doesn’t just blow everything else away in some way or another. It’s another Android 2.X device, the specs are compareable to the Droid and the price is right in line with other smartphones.
But it isn’t a gPhone. That’s the problem… everyone was expecting THE Google Phone. THE gPhone. And that’s not what this is… at least I don’t think and I hope not. But any way you slice the cake I think Google should have been aiming for something that was head and shoulders above everything else. Why not launch the Nexus One alongside Android 3.0?
It’s difficult to argue that the Nexus One will hurt Google in the short run – it’ll sell way more than the “modest” prediction of 150,000 by Andy Rubin, especially once it’s opened up to more carriers. The argument that it hurts Google in the long-run could be made much more easily since it slightly muddies the waters with their partners, but the argument that it will help them by changing the paradigm in the mobile distribution model is just as strong.
So what do you think: will the Nexus One be considered a good thing for Google in the long run? What will it take to make it a success in the short-run? In my opinion it will be sleeper/quiet short AND long-run success, but I think if Google had forced the specs to be a bit more outrageous and coincided the release with a bigger upgrade of Android, they could have knocked it out of the park.
And actually that makes me wonder… do you think it’s possible that Google planned for the Nexus One to be the first phone with Android 2.0 but Verizon negotiated that as part of the Droid deal? That would certainly thicken the plot and its always interesting to ponder what goes on in those cigar filled rooms. Hmmmmm.
Oh yeah… the ultra-smart Om Malik seems to agree with me. Or maybe I agree with him. Either way, we share the same opinion that the sales numbers are optimistic but either way, Google is cooking up success.
Are you finally back Rob?
they are gonna learn a lot from the web advertising for this phone… and use the results to sell more ads if it works
the nexus one doesn’t hurt the partnerships with manufacturers, is just another retail channel, in the future you’ll see more phones sold through the store from Motorola, LG, Samsung, etc. The goal is to get people used to buying phones online, this is what they meant with “baby steps”, they need to get the store up and running and test everything out first (customer support).
One detail people often forget is that Google pushes the OTA updates to the Nexus One, no carrier mess, and you can bet they have some sort of deal with HTC that allows them to update it without HTC or something similar.
So, in theory, if everybody buys their Android phones from Google, every phone would always have the latest OS version, therefore, killing fragmentation.
That’s how I think about this store, it’s their solution to the fragmentation, taking control away from carriers and getting more involved in the updates.
I think one of the huge reasons the droid had so many sold was the really cool advertisments. I have yet to see a commercial about the N1 and anyone i ask if they have heard about it, nobody says they have. I own the N1 myself and i think its an amazing device. Maybe if google will get some adds out on the computer more like the droid had we can see some more success.
My take for what it is worth.
First you can’t compare the IPhone and Nexus sales.
The IPhone has a 3 or 4 year head start building a sales base.
The Nexus on the other hand came out after Christmas and after everyone jump on to that first real smartphone to be proud of (Droid).
Now Android has to compete with not only the Droid but all the other Android phones now being offered and those announced to be coming soon.
I thought the Droid was way cool, then here came the nexus and then others… I know that before I plop down good money for an Android phone and 2 year contract, I want to wait a little to see who’s Android Phone comes out on top about mid year.
Unlike Apple, I feel that Google has never intended for this phone to be the #1 selling phone in the world, nor does it need to be.
Apple is on there own. If they don’t promote / develop / and sale the IPhone no one else will.
Android on the other hand has hundreds of developing teams all over the world working to make Android the next OS of choice.
Google also does not want to scare the other developers away by being to strong of hand.
So the Nexus One’s real purpose is the following.
– To showcase how awesome the Android hardware can be.
– To show the public that it believes in Android and is willing to put money down to prove it.
– To open the world of unlocked phones, Few others can afford to be the first. Google on the other hand has nothing to lose by being the first.
– To give Google there first hands on with marketing and supporting a “real world” product to the public.
Some thoughts on the Nexus One strategy:
1. I think its just another way of selling a phone, as told by folks at Google. It isn’t meant to be hugely different from other Android devices.
2. In fact, with the new approach, Google is attempting to further unify the platform. (Google would certainly partner more manufacturers and launch more Android phones if this approach is reasonably successful.)
3. As Google is only co-branding the phones, this approach means earnings for the manufacturing partner as well as Google. Thus, Google has opened new revenue channel that can finance further development of the Android platform.
Already having an Iphone (for my wife) I refused to get it for me as the Apple business system was really getting me P…. off.
So I waited and read and hoped. 5th of january came and I bought the Nexus.
The apps are still better on the Iphone, the touch screen and the software easiness of use is also still better on the Apple product. But Then comes speed, multitask, plug and play on any computer with a simple cable, open source, and many other features and I can’t help but thinking that I did the right choice. Nexus one might not sell well. Google team probably did what they could but as with previous experience I hope they will correct that and that within a year (having learnt from their mistakes) they will pull out something amazing. Gmail wasn’t made in one day and I trully hope that 2011 will bring something that will kick ass.
The Nexus currently is not superior to the Iphone. It has superior abilities but way to many problems (Multitouch, lack of beautifull apps, dizzy touchscreen, software issues). If this will be fixed. Then Google hold the key to market share.
just because google makes $ from web ads, doesn’t mean they actually work. You need tv ads AND the ability for consumers to try before they buy.
Google is just starting to sell hardware from their site. It’s a HUGE deal. Soon enough there will be Nexus Two, Three, Four, most importantly, with competition, cheaper unlocked Android phones. The cheaper the phones, the more they will sell. Eventually Google will facilitate the sale of $199 unlocked Android phones with free Google Voice calls (since Google will purchase wireless bandwidth in bulk or build out White Spaces), $199 Chrome OS Laptops. That is just until we see $99 Phones and Laptops.
I think Americans are too stupid to see what Google is trying to do for them.
Let me tell you how telecom works in the rest of the world. There are no dealings between handset manufacturers & network operators to screw the customers. We buy the phones directly from handset manufacturers at full price & then shop around for network operators depending on the prices. Since they do not sell the phones, there is intense competition among them to attract customers based solely on call & data charges.
So much so that in India you get 1000 minutes for just $10 (this is not monthly charge, but as long as those 1000 minutes last & for me 1000 minutes last for about 2 months… so $5/month for calls) and you get 2GB/month DATA for just $2 (jump to 4GB for another $2; there is no 3G here which sucks but you get 150-200kbps speed on EDGE which is OK for browsing). There is price war going on between network operators, not handset wars. Bought my unlocked HTC Hero for $700. After 2yrs of usage my total costs would come to around $900-$1000 ($700 for phone & $200-$300 for network usage). Come to think of it, with nexus my bill would have come down by another $150.
Google is trying to do the same with nexus i.e. to separate handset manufacturers from operators & forcing operators to hunt for customers based solely on network usage charges. But there is one serious flaw in the US; phone on one network doesn’t work on another. So when you buy a phone from manufacturers directly, you are also indirectly choosing your operator (eg. Nexus & T-mobile) which rules out any competition among operators. Nexus’ only flaw is that it doesn’t work on all networks. Anywhere else in the world (esp in Asia) nexus would have been an universal phone working across all the operators (& starting price wars lol)
So I don’t see anything changing anytime soon in US until you get a phone that works on all operators. Then see them fighting like cats & dogs to attract customers….
PS: typed from my Hero… blame any spelling mistakes on auto-correction!
Yeah I agree with many people on here that Googles going to kick ass once they get there store full of really good android devices…and this is going to be a really cool thing to behold
Somehow, I just don’t believe those 3GS numbers are going to happen. There are too many options for customers now.
Google never planned on making the number one selling phone. If they wanted to do that, they would of had TV ads. The whole Nexus One project is a Beta, or “baby steps”, for everyone. Google could open up doors to the industry. Open source OS, constant OTA updates for a phone, and VOIP options(that do not go against a carrier’s ToS) are just a few possibilites. Also, in the United States, it could lead to more carriers offering unsubsidized plans.
The Nexus will be good for Google, but it will be equally better for Apple’s iPhone and the Driod. There is a simple economic concept at work here that we have seen many other times in recent history. Competition is good for not only those who launch new products, but also for those that are being competed against.
Take a look at Starbucks. In some minds, Starbucks is the evil corporate giant that is taking over every town in America, and is not good for the local mom and pop coffee shop in town. FALSE. Studies show that in nearly every town that Starbucks has opened a store and there is a competing local coffee shop, the local coffee shop has done better financially then it did prior to Starbucks arrival. What Starbucks does for the coffee drinking industry is bring awareness to a community that coffee shops are available. Thereby, more individuals drink coffee with the arrival of a company that markets.
In a capitalist society/free market, competition = growth for all parties involved. Now there are exceptions to this rule when saturation of any product or service is reached and sales can be degraded. But let’s be honest here, 3 competing smart phones is not exactly saturation when you think about our society’s insatiable need for better & faster communication technology.
In my opinion, Nexus will see increased sales for Google. But iPhone and Driod will also see increased sales after the Nexus launches. The Nexus is bringing more awareness to the market of smart phones. This article (among millions like it), is proof that there is growing awareness of smart phones in the market.
@JC
are you sure its the Nexus One that you’ve tried !!! Dizzy touchscreen !!! even my aging g1 doesn’t have such an issue, it’s 100% accurate as the iphone.
As for the lack of beautiful apps, i dont know what you’re talking about but android market is getting and most of the great apps are out there, iphone is only superior in games market.
This is Google we’re talking about here, we may not understand why there were no tv ads or a way to test the phone out in hand but they’ve got something up their sleeves and know exactly what they are doing.
Another reason for modest sales is the fact that N1 is only available in USA, Hong Kong, Singapore and UK. What about the rest of Europe? Japan and Korea? Australia?
This is exactly what I try to tell everybody. This isn’t the phone that’s going to destroy the world of cell phones. It’s the launch of a new selling style. Now that they have started, they’re going to start selling a lot of phones the way they did the Nexus. It does not conflict with anybody, I’m so tired of hearing that. They stressed so much that HTC made the phone. Google has stated several times that they will NOT make phones. They will not enter the hardware side of cell phones. All I have to say is that I’m glad they’re going with HTC and not some other joke brand like Motorola. I will never own anything Motorola again.
I would love to buy this phone but no way am I going to spend over $500 for another phone or be forced into a 2 yr. plan that costs a ridiculous $79 per month for 500 mins. of talk time – I already have a smart-phone on t-mobile & only pay $50 per month for unlimited everything – anyone who pays there rates to either T-Mobile or AT&T is a fool.
Until people take these carrier to the mat & demand better rate plans nothing is going to change. I guess the old saying “More money than sense” really applies to most smartphone / cellphone users.
I think besides unveiling a “new” way of selling phones, Google also introduced the N1 as a proof of concept phone – that Android OS has matured to such an impressive level as to considered an equal (at least) to Apple’s OS. Also, that it’s possible to have a phone with such awesome hardware specs at a relatively affordable price. The price point is the reason they couldn’t really go overboard with the specs. They wanted to show that one could get a top Android phone comparable to the 3GS and other top phones, at a cheaper unlocked price. In real life, the effect on me is that now, when I look at various Android phones, I use the N1 as a yardstick, to compare if the specs/price are up to snuff. My question to myself would be, is it worth getting X phone for $Y when I can get an N1 for USD 580 ++ shipped to me within about a week of my order? So the bar for manufacturers is raised. For instance, the price of an unlocked Hero in my country seems to have increased in price, prior to the N1. Now, people will need to ask themselves if it’s worth getting a Hero with a less powerful CPU and older OS (albeit with Sense) when the N1 is comparable in price? Hopefully, the demand and prices will adjust accordingly.
are you kidding? with Google being the biggest advertising company in the world, it’s not a question of will they succeed, it a question of how many billion dollars they will make out of it