By The Nexus One had an outstanding amount of hype prior to its release – and rightfully so – but sales of Google’s first phone in their new distribution channel haven’t taken off and analysts are noticing. Goldman Sachs has slashed their original estimates of 3.5 million units in 2010 to a paltry 1 million. Even worse, if/when the company launches the Nexus Two and markets it more aggressively both on and offline, they’re only predicting annual sales of 2 million handsets:
We previously estimated that Google might sell 3.5 mn Nexus One units in 2010. Initial data-points were disappointing, possibly due to limited marketing and customer service challenges. Flurry estimated (based on mobile traffic) that Google sold 20,000 in the first week, and 80,000 in the first month, both annualizing to 1.0 mn. We forecast that Google sells 1.0 mn Nexus One units in FY2010, benefiting from US carriers other than T-Mobile, and non-US carriers such as Vodafone, promoting the device too, but suffering from limited marketing activity. We assume that Google rolls out a second Nexus handset, markets it more aggressively, and makes it available offline, and therefore forecast that Google sells 2 mn handsets per year in 2011 and future years. — Goldman Sachs
You could easily say that this isn’t about generating handset sales but instead establishing a new distribution model and if you did, you might be right. But it doesn’t take away from the fact that the pre-announcement hype and post-launch sales haven’t been playing in the same ballpark.
And then you have what Andy Rubin would say – that the company hoped to sell 150,000 units and would consider that a success. Was he just being modest in hopes of crushing those estimates? Perhaps. But clearly the company hasn’t pushed the Nexus One to its limits. They even ran a SuperBowl spot solely to promote Google Search, a product that the entire universe knows about, while allowing the Nexus One to live on in offline ambiguity.
As for the Nexus Two and predicted sales? I think it totally depends on how hard Google decides to push the device, if their new “distribution model” gains a bit more focus, and whether or not they get more carriers on board. Right now they only have T-Mobile USA committed to offering the Nexus One through their site although both Verizon and Vodafone committed on launch day – still no offerings from them. And of course you’ve also got branded versions of the Nexus One, dubbed HTC Desire (with some improvements), hitting select markets.
Let’s face it though – 1 million handsets isn’t bad for what by all accounts seems more like a “test” than anything else. And if Google continues to “test” with the Nexus Two I would consider 2 million a success as well. But if they ever decide to kick things into a higher gear, I think that 2 million could not only easily be beaten in 2011 but probably doubled and beyond.
Lack of exposure hurts this phone immensely. They don’t even have the unit @ T-Mobile locations to test. No one is going to fork over money for something they cannot get their hands on. I would buy if I am able to upgrade on my phone plan, but Google or T-Mobile is not making it easy for me to do so. So I wait, with my G1…still.
Such hard hitting analysis from Goldman. “Wellll…. I guess we were wrong about the 3.5m and these other guys are saying 80k a month soooo…. 2010 1m! And jeez I bet an offline marketing campaign would really help sales by, oh I don’t know, doubling them. So yeah, 2m for 2011!”
I’d buy a Nexus One today if offered from Sprint. This new distribution model is fundamentally flawed when it only offers one carrier. I hear its coming to other carriers soon…but still waiting. ugh. :-(
Over in Canada, this phone isn’t even available to us yet. We still get the “Sorry, the Nexus One phone is not available in your country or region.” on google’s phone site.
Such a disappointment.
Why buy on on sprint, when Sprint is coming out with the supersonic. Bigger, better, and 4G. No need at all.
The problem with the Nexus One is that everyone expected it to be a game changer, and it was not. Google offers so much for free, and that is how they destroy the competition. The Nexus One is an expensive phone that you can not touch unless you order one. Google needs to get these phones into stores at cost. Then they will dominate the market. Google makes all of its money off of users searching on these phones, giving them away at cost will still make them money if they can get into 20% of pockets.
i bought n am very happy with the xperiance
can’t wait for n2.
Offer it in stores and sales will skyrocket.
As everyone else has pointed out: no retail sales plus restrictive subsidy structure on nation’s 4th largest carrier = very modest sales. It will do better once it hits Verizon and possibly AT&T, but if the subsidy system is as restrictive as it is now, not much better.
I get what they are trying to do, but they’ve set up too many barriers for a whole lot of would-be early adopters. I would love to have this phone and would be showing it off to all of my family and friends. But because I’m on a family plan with a grandfathered rate plan, I can’t get even $1 off full retail price, even if I’m willing to re-up for 2 years and add a data package.
Besides the crappy distribution business model, and the crappy customer service model, though it has a lot of positives, the Nexus One has suffered from a bad reputation due to nagging hardware issues:
1) ongoing 3G connectivity issues
2) touchscreen issues
3) awful speaker
I agree on the lacking support and that it should be available in shops. But where they really lost is on marketing. Seriously, average Joe does not hang out on phandroid.com and androidcommunity.com. They must market the product to make people aware of it, not just us Android geeks. I don’t understand why they didn’t focus on the marketing, that’s the only thing they could learn from Apple!
Oh Goldman Sachs idc if ur broke, bankrupt, and owe a bazillion dollars in bailout money i still trust you. So u must be right about the nexus one and everything else u predict…
I live in Portugal and there is no option to order the Nexus One at all, so I had to use a VPN software to trick google store and order it as if I were in US, but had to ask a friend to bring the phone delevered to the hotel he went in US.
So if there are some people willing to do this, just imagine how many more would buy the phone if it was available in local market.
PS: in Portugal we have more mobile phones than persons. Android is not well known, the HTC Magic is the “best” known and most sold android phone here, almost nobody knows the new generation of android hardware (Droid, Milestore, and Nexus are not available in stores), and other phones (Windows and iPhone) still sell a lot because no one knows the funcionality of android. When I show my Nexus One no one doubts it’s better than any other phone.
Most people go after what they hear from local media and other dumb fashions, and don’t investigate the funcionality before buying a device. That’s why LCD’s are selling much more than Plasmas. :(
I really dont think there was much hype around this phone. It wasnt like the iPhone which everyone in the world heard about. Only those who follow the phone markets and phone tech really know about the Nexus one. Look at the mainstream ads that were pushed for the droid. Most people know that the droid is a “cool new phone” but no way do as many people know about the Nexus. Not much hype at all…
Google should’ve subsidized the phone too instead of trying to make a huge profit. From what I read the actual materials cost around $150 for each phone, they could sell it for $250 and still make a nice change for HTC too. But instead it’s too expensive, esp. for U.S. people who aren’t used to carrier subsidized phones.
Hey so does anyone know if the HTC Incredible is coming out for Verizon at the end of this month? What are the differences between that and the N1?
Besides the complete lack of availability in some countries, limited availability for T-Mobile users in the USA (no family plans available), Poor Customer service, and the nagging issues such as webby mentioned above, to me the biggest elephant in the room is the complete lack of any response from GOOGLE as to when there will at least be an attempt to fix the issues. They will not comment at all on their own forums as to what is going on.
I agree with some of the other post in saying that it needs to be in stores. It is very hard to buy something for that much money or to sign a contract on something if you can’t hold it in your hands first. Hello? Google? Doesn’t that make sense.
When its released on more networks and outside of the US then the sales will go up.
Give the Nexus one to bigger U.S. carriers, and the google phone will be a huge hit! If At&t got this super fast phone on their super fast network then man that phone would be the biggest phone on the market. Also, if they put the Nexus One in stores to allow for people to play with the device would help thei8r sales in the millions…….
@cellnerd You’re a moron kid. Goldman paid back the TARP funds 9 months ago. Try reading the news once in a while.
Simple fix…
release an unlocked CDMA phone in the USA
Hey Google, here’s a tip. If you want a successful launch of a handset, don’t pick the carrier which has unique 3G frequencies to the rest of the world and has a small customer base. Had they made a single phone that also worked on AT&T, they’d have sold 3 times as many.
Idiots.
If it were not on T-Mobile I would have one. T-Mobile’s odd ball bands and coverage outside of any big city is just a dealer killer. I have had T-Mobile, and there CSRs are awesome. Problem was I was always calling them because of the crap phone or service. As someone who travels all around the DC metro region DAILY for my job. COVERAGE IS PARAMOUNT.
Sprint has pretty good service where I live and roams on to VZW when it has too. AT&T is getting stingy about “UNLIMITED DATA” but there is service if you have a decent radio. (A lot of iPhone issues are really the radio. Not so much AT&T.) Now VZW has Skype integration coming out and the best coverage around here. Put it on VZW and people will buy it. Hell I have a in car booster that would hold the phone where my TomTom sits now.
But I have to say, everyone just “knows that the iPhone is the best.” They see adds for it all the time. They hear about “those app thingys.” Its painful as a Linux person to try and explain to people that APPLE did not invent the wireless phone. Did they change the game??? Arguably YES.
But as I sit there talking to a customer who’s computer was just FRACKED due to his kids. “Well I am ready to buy and iPhone… Apps. Yaps. Whatever.” All the while I am staring back at him trying to explain that Android or even WEB OS would be a better choice. Both my co workers whip out there iPhones. BOTH WITH ZERO SIGNAL AT THIS GUY’S HOUSE! And he still wants one???
THAT IS THE POWER OF ADVERTISING.
(I shamefully pulled out my Nextel i580 and called the office to say, “if you need either of those guys… you better call my phone.”)
I have had a Nexus One since the first day and its the best phone I have ever had but the whole touch screen and 3G problem is getting really annoying. Two threads on Google’s support forum are at 2,200 and 1,800 posts because we haven’t heard anything from Google about fixing our phones for 1 1/2 months. Some people are on phone number 6 and they still have bad problems. We don’t want to give up this bad ass phone so we just put up with Googles shit. I started a new thread and its only purpose is to see how many people want an update from Google. http://www.google.com/support/forum/p/android/thread?tid=6e0ad1075b975350&hl=en
Had been a Google loyalist until I bought the N1. Will not buy another Google product until they resolve ongoing N1 issues! Can’t quite understand the moronic attitude allowing the issues to drag on.