Nexus One a Failed Experiment In Online Sales 366
Posted
by
timothy
from the but-a-nice-phone dept.
from the but-a-nice-phone dept.
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.'"
False (Score:5, Insightful)
Competition (Score:5, Insightful)
Lack of promotion? (Score:5, Insightful)
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?
Re:False (Score:3, Insightful)
And when you bought it full MSRP without subsidy, there was little to no savings per carrier on your monthly bill.
Online isn't the problem, it's carrier subsidies (Score:5, Insightful)
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.)
Re:False (Score:5, Insightful)
Failures:
1. Large upfront cost. Consumers don't think about future costs.
2. Not shoved in your face. Consumers aren't smart enough to seek things out.
3. Too many hoops. People had to do too much work if they wanted to get carrier subsidizing worked out.
Why are we still obsessing over this? (Score:3, Insightful)
The reason it failed is likely a lack of marketing. That, and it was rather expensive. And it wasn't even possible to use it in some places because you need to buy a phone from your operator, right?
Anyway, hasn't this exact story been posted several times on Slashdot? This is definitely not the first "Nexus One failed" post. Why do we keep discussing it? Time to move on, perhaps?
Jumping to Conclusions? (Score:3, Insightful)
Re:False (Score:5, Insightful)
The reason it seemed expensive is because you weren't paying off a loan with the remainder of your wireless contract. Considering that all smartphones are really just small computers, their prices are pretty much where they should be.
The reasons behind the demise were probably a) some people can't do the math to figure out how much they're really paying for the phone, and b) others really like upgrading every 2 years to impress their friends.
Re:False (Score:4, Insightful)
Was it really a failure? (Score:5, Insightful)
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.
Re:Lack of promotion? (Score:4, Insightful)
Nobody outside of the geek crowd knew about the nexus 1. If a layperson did encounter one on the street, it likely wasn't a memorable experience.
"you paid how much for that!? and it still doesn't have the cool animations the iphone has?!!"
Good luck creating desire among the general public with talk of open development and how many IDEs you can use with android.
Re:Competition (Score:5, Insightful)
Oh people can do the math (Score:3, Insightful)
but they have been conditioned by expert marketing to view what they can afford by monthly costs. A phone contract looks less painful when you say $50 a month instead of $600 a year. People are made poor by the multitude of 'monthlies' they pay for. For many the cost difference between a contract and no contract is a wash.
Lets not forget one other issue besides price, better phones were not far behind coming out, not only technically better but marketed better.
Re:False (Score:5, Insightful)
The real problem was that nobody knew that it was available. It got plenty of attention on /. and other tech sites, but take an average Joe who owns a smart phone and I guarantee you that he's never heard of it.
Re:Not from the source (Score:3, Insightful)
I think it's rather silly to flatly state that selling phones direct to consumers is "dead." Just because Google didn't out sell the iphone, or push millions of units doesn't make direct-to-consumer sales dead. It just means that if you want to sell lots of phones direct to consumers, there are many lessons to be learned from Googles experiment.
I bought a Nexus One unsubsidized because Apple and AT&T refused to unlock my paid-for iPhone. I just moved out of the US and wasn't willing to pay literally hundreds of dollars per month to keep my phone tied to AT&T. Now, here in Norway I pay around $30 USD for the same basic service I was paying AT&T $85/mo for in the US. Sure I don't have the unlimited data that I had in the US, but 250MB/mo is enough for me and I can always buy more if I need it. At least I'm not paying the subsidy price forever like most US phone users.
I don't know if the average person really puts much thought into what they are paying for in a phone contract, but there will always be a market for users that want some more choice in their contract. It doesn't look like anyone is going to swoop in to fill the N1 market for the time being, but that doesn't mean that selling phones directly to consumers is "dead." It just means that no one has found the right way to do it and be profitable yet.
Re:False (Score:5, Insightful)
I'm slumming on T-Mobile, and if this is slumming then call me homeless.
Hella better than Verizon with customer service, features, and choices.
The price is the reason I switched, and the rest sold me.
Re:Online isn't the problem, it's carrier subsidie (Score:1, Insightful)
especially since no provider gives any significant plan discounts to those who "bring their own device" in the USA.
My Android bill is $29 a month from Page Plus Cellular. Of course the carriers who sell expensive phones want you in the contract, so they would never offer you a good price if you bring your own phone in.
Their job is to fuck you, but not hard enough for you to switch to another company. Providing you with good cell service at a good price is quite secondary.
Fear, uncertainty, and doubt (Score:4, Insightful)
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 [telegraph.co.uk]
Re:False (Score:4, Insightful)
Re: Slumming on AT&T (Score:4, Insightful)
n900 and carrier discount (Score:5, Insightful)
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?