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Nexus One a Failed Experiment In Online Sales

timothy posted more than 3 years ago | from the but-a-nice-phone dept.

Google 366

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.'"

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False (5, Insightful)

mark72005 (1233572) | more than 3 years ago | (#32980426)

The reason why the Nexus One failed is because it was so damned expensive out of pocket.

Re:False (3, Insightful)

Anonymous Coward | more than 3 years ago | (#32980478)

And when you bought it full MSRP without subsidy, there was little to no savings per carrier on your monthly bill.

Re:False (4, Informative)

h4rr4r (612664) | more than 3 years ago | (#32980672)

Not with T-Mobile. Go look at their site.

Re:False (1)

arkane1234 (457605) | more than 3 years ago | (#32980770)

Not with T-Mobile. Go look at their site.

Yes, but that's with every phone.
It's piecemeal and you have to think and make decisions. The problem is, most people don't like decisions and they like neatly packaged "solutions".
That being said, I have that T-Mobile plan you spoke of ;)

Re:False (1)

sexconker (1179573) | more than 3 years ago | (#32980772)

And when you bought it full MSRP without subsidy, there was little to no savings per carrier on your monthly bill.

Horse shit.
I bought it through Google because I have an unlimited data plan with AT&T that costs $10 per month. If I had gone through AT&T to get a new phone (Nexus One or not), then I would have been forced to "upgrade" my contract and pay at least $20 more per month.

Re:False (4, Interesting)

ani23 (899493) | more than 3 years ago | (#32980488)

Amen Most iPhone sales are online. Its not that they want to look at the phone in the store. They want it subsidized. wonder why they dont go subsidized via tmo and att.

Re:False (4, Funny)

mark72005 (1233572) | more than 3 years ago | (#32980550)

No, iPhone consumers don't want to look at the phone in store. Mostly they don't even care what it does, they just want an iPhone.

Re:False (5, Funny)

kenj0418 (230916) | more than 3 years ago | (#32980650)

they just want an iPhone.

Well, it does have the wifis and the bigger Gee Bees.

Re:False (1)

CharlyFoxtrot (1607527) | more than 3 years ago | (#32980886)

No, iPhone consumers don't want to look at the phone in store. Mostly they don't even care what it does, they just want an iPhone.

With tens of millions of the things out there odds are they've played with a friends' iPhone, no need to go to a store to do that. It's not really an unknown entity; everyone who wants one knows what it looks like and what it does.

Re:False (5, Insightful)

Anonymous Coward | more than 3 years ago | (#32980492)

Exactly. Plus, people shopping for an upgrade phone wouldn't see it on their phone company's website.

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.

Re:False (1, Informative)

mark72005 (1233572) | more than 3 years ago | (#32980594)

I think you could get a subsidy if you wanted to slum around on T-Mobile, actually.

Re:False (2, Informative)

Kelson (129150) | more than 3 years ago | (#32980764)

I think you could get a subsidy if you wanted to slum around on T-Mobile, actually.

Yes, you could get an upgrade price on T-Mobile...but only if you had an individual plan. If you had a family plan, and wanted to upgrade one of your phones to a Nexus One, you had to pay full price for the unlocked phone.

Re:False (5, Insightful)

arkane1234 (457605) | more than 3 years ago | (#32980828)

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:False (4, Insightful)

mungtor (306258) | more than 3 years ago | (#32980570)

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 (4, Informative)

MrEricSir (398214) | more than 3 years ago | (#32980628)

But wireless contracts tend to be the same price whether you're paying off a loan or not; in other words, you're just wasting a lot of money if you didn't get a phone+contract from your carrier.

Re:False (5, Informative)

h4rr4r (612664) | more than 3 years ago | (#32980708)

T-Mobile does give a discount for bringing your own phone. It is why once the contract on my droid I will be going that way. That and they have phones with unlocked bootloaders.

Re:False (1)

ducomputergeek (595742) | more than 3 years ago | (#32980924)

T-Mobile isn't even an option in this area of the Midwest. Closest T-Mobile store is 90 miles away. Here it is Verizon, AT&T, or Sprint and there are no other choices. And that is the case for a lot of places. For what the N1 cost I could just about buy a low end iPad 3g and docking station + cheap just a phone cell phone and have a platform that functions better for email/apps/web surfing than a phone and probably a phone with better reception for phone calls than a smart phone.

Re:False (1)

MobileTatsu-NJG (946591) | more than 3 years ago | (#32980954)

What kind of discount? Can you do it without contract?

Lots of people mentioning T-Mobile here and NOT giving details.

Re:False (0)

Anonymous Coward | more than 3 years ago | (#32981132)

For me I saved 30 dollars off their unlimited data plan by using my own phone instead of getting a bundle. Also no contract required (as they are not recovering the loss leader phone).

That's 720 dollars worth of phone which I could use and no contract.

TMobile for the win.

Re:False (2, Informative)

AltairDusk (1757788) | more than 3 years ago | (#32980822)

Tmobile has the Even More Plus plans which are for unsubsidized phones and are cheaper than an equivalent subsidized plan. If you did the math it was cheaper to buy a Nexus One outright and get the Even More Plus plan for two years than it would have been to get the phone subsidized through Tmobile ($200) and spend 2 years on contract with an equivalent subsidized plan.

There are also situations like my own where I wanted to upgrade to an Android phone but was locked into another year on AT&T thanks to signing a 2 year agreement to get an iPhone 3gs subsidized. I sold the 2gs for almost as much as I spent on the N1. Having phones not locked to carrier contracts gives the user much more freedom.

What people don't realize is that paying full price for phones and getting plans without the subsidy built in is not only cheaper in the long run but much less restrictive (Tmobile's Even More Plus plans for instance don't require a contract). The problem is that Tmobile is currently the only carrier that offers such a plan and the carriers for the most part love their lock-in. Google had the right idea, they didn't put the effort into it or stick with it long enough.

Re:False (1)

AltairDusk (1757788) | more than 3 years ago | (#32980840)

Argh where's an edit button when you need one? Should have been "sold the 3gs" not "sold the 2gs"

Re:False (1)

farble1670 (803356) | more than 3 years ago | (#32980968)

how much is freedom worth to you? do you value being able to move to another carrier if the service is poor or if their customer service mistreats you?

Re:False (0)

arkane1234 (457605) | more than 3 years ago | (#32981014)

Let me put this into math for you so it's not just "nuh uh!" as you did.

T-Mobile example
HTC HD2 - $449 MSRP or $199 with 2-year contract ($250 floating in the air at this point)

Typical medium plan:
1000 minute/unlimited web/unlimited text - no contract: $69.99 2-year contract: $99.99

Over 2 years, the difference between no-contract and a 2-year contract is $720. ($30 * 24 months)

Even if I bought my phone brand spanking new MSRP from T-Mobile, I'd be saving ~$270 over 2 years.
The fact that I bought the phone used for $290 (4 days old, wasn't his thing) means that I've saved $430 over 2 years.

Even if my phone doesn't work for 2 years, I can still buy another and either come out even or better.

The flexibility is above all the reason I do it... if I lose my job and heaven forbid I can no longer afford my phone (6+ months of unemployment does that...) I can disconnect it without paying $200-$300 in cancellation fees. I can also just switch a phone as I need, no worries.

Re:False (1)

nobdoor (1496229) | more than 3 years ago | (#32981046)

I use an HTC EVO that I bought outright, along with PagePlus for service. Pageplus is an MVNO that uses Verizon's network. It's considerably cheaper, as I spent $450 on the evo, and $30/mo for 1200txt+1200min+50mb.

I use wireless networks for web access (I'm pretty much always either at school, work, or home), and when I'm in a pinch, the 50mb is there when I really need it.

Oh people can do the math (2, Insightful)

Shivetya (243324) | more than 3 years ago | (#32980690)

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 (3, Insightful)

DJ Jones (997846) | more than 3 years ago | (#32980574)

That and the fact that T-Mobile was the only reasonable carrier. What they failed to do was negotiate a contract with Verizon. I would have bought one in a heart beat if I didn't have to switch to T-mobile with minimal 3G coverage. Alas, such a deal wasn't favorable for Verizon who prefers to lock down all their hardware.

Re:False (1)

imgod2u (812837) | more than 3 years ago | (#32980606)

You could get it subsidized through T-Mobile for $199. Same as any other smartphone.

Re:False (1)

snarfies (115214) | more than 3 years ago | (#32980620)

Couldn't agree more. Once I saw it was almost $600 I dropped my plans to buy it and went with an unlocked Nokia E61i at half the price. Been using it for over two years now with few complaints.

Re:False (0)

Anonymous Coward | more than 3 years ago | (#32980636)

Especially when compared with significantly cheaper, yet better featured HTC models, like the HTC Desire.

Re:False (1)

lethalp1mpslapper (238264) | more than 3 years ago | (#32980688)

You do realize that the Desire is the exact same hardware as the N1, right? The only difference is the trackball on the Desire is optical.

Re:False (0)

Anonymous Coward | more than 3 years ago | (#32980854)

HTC Desire has an FM radio, which is useful for listening to BBC radio stations. Like I say, there was at least a couple of hundred pounds difference between buying an unlocked HTC Desire, compared an unlocked Nexus One.

Re:False (1)

locallyunscene (1000523) | more than 3 years ago | (#32980666)

That and you can only take them to a very limited number of carriers in the U.S.

Re:False (4, Insightful)

Lord Byron II (671689) | more than 3 years ago | (#32980714)

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:False (1)

nitefallz (221624) | more than 3 years ago | (#32980718)

There's truth to this too, but I disagree in part with the consensus that this failed because it was online only. I think a large issue was how restrictive they were in selling the subsidized phone to existing T-Mobile users. No one from T-Mobile was eligible to upgrade to the Nexus one for any kind of discounted price, and some other malarkey. I know, I dealt with this problem first hand. I was within the contract renewal time frame and I jumped through a bunch of hoops with T-Mobile trying to get them to change my account or do SOMETHING so that Google's website would see me as A) Eligible to upgrade and B) provide me with the discount. Neither options were allowed as told to me by T-Mobile. All through this I stumbled upon the pending release of the HTC HD2. I called T-Mobile and explained the situation and they gave me the phone right away with the proper discount.

Google lost a sale here because of their restrictive model. Even if the phone was sold in stores they still wouldn't have gotten my money. The sad part is I tried everything I could to give them my money for this phone and they didn't want it, so to speak.

Re:False (1)

farble1670 (803356) | more than 3 years ago | (#32980910)

expensive compared to what? i hope you aren't comparing subsidized phone costs.

Re:False (1)

bonch (38532) | more than 3 years ago | (#32981106)

I think it was a combination of a lot of factors, but another interesting issue is that there is now no phone on sale that runs Android 2.2. Sometimes, it looks like Google doesn't know what it's doing.

doom! (-1, Troll)

Anonymous Coward | more than 3 years ago | (#32980448)

I have brought doom to you all!

oh no! not doom!

yes doom.

Competition (5, Insightful)

orcateers (883419) | more than 3 years ago | (#32980454)

Anyone else think that the Nexus One was a project designed to push Android adoption, and that Google's support for the hardware fell off because the rest of the Android hardware market bulked up sooner than they expected? it's an idea i've considered.

Re:Competition (4, Insightful)

fishthegeek (943099) | more than 3 years ago | (#32980686)

IMHO it was because the hardware that was available from the carriers was really anemic. I had a G1 and it was really slow, had little memory and frankly was ugly. The MyTouch wasn't much better. I bought the Nexus 1 about 3 weeks after release and I love the phone. I suspect that Google wasn't trying to push Android adoption as much as it was trying to push OEMS to elevate the quality of the hardware. Since the N1's release we have the Evo, Droid X, and the Vibrant to hold up as high quality phones.

Re:Competition (1)

Kalidor (94097) | more than 3 years ago | (#32981120)

I think it was more targeted at the Carriers than the OEMs persay. Let's remember the History of the G1. It was essentially the 3 year old google dev phone with a slightly 'shinier' case that could handle branding. Carriers weren't initially willing to do the buy in without a sign-off from the software writer (the big G, duh) and they weren't willing to re-test any new phone that HTC or any OEM had come up with.

I think Google use the N1 as a way to convince the carriers to "take a chance" and probably to stop bugging their dev team for signoffs. They were playing it safe with phones that didn't deviate from the original dev spec too much as a way to ensure the system would work. The N1 likely scared carriers into ordering more advanced units that the OEMs just couldn't get out of prototyping do to tooling cost restraints.

Re:Competition (3, Informative)

phobos512 (766371) | more than 3 years ago | (#32981124)

Yeah except that the G1, myTouch, N1, and EVO were/are all made by the same company...

Re:Competition (1, Interesting)

Anonymous Coward | more than 3 years ago | (#32980778)

Yes, I think this is what the purpose of the phone was, that and pushing processor speed up. With all the other android phones out there now that have the "Google" experience, I don't see why they would see the need to have a specific "Google" phone. It's probably more of a sucess than a failure. Of course that's my opinion and I don't have any citations for the apple guys who might ask for them. I am pretty happy with my Motorola Driod and look forward to the update to Andriod 2.2. I had an iTouch and I think it will be the last thing I own from Apple, unless the company changes. I don't think very highly of Verizon since the customer service sucks (like everyone else out there these days really) and they are expensive, but where I live I have great coverage. I was several miles out on the Chesapeake Bay on my boat that broke down and I was able to call for a tow and look up parts on 3G while waiting. That's the only reason I stay with Verizon.

Re:Competition (1)

mmmmbeer (107215) | more than 3 years ago | (#32980902)

Considering the Incredible and EVO are really just updated versions of the Nexus One, I'd say you are correct.

Lack of promotion? (5, Insightful)

MrEricSir (398214) | more than 3 years ago | (#32980472)

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:Lack of promotion? (0)

Anonymous Coward | more than 3 years ago | (#32980562)

This was my thought. I in fact did buy one after stories about it, but waited for a colleague to run his for a week before taking the plunge.

I love the phone - it's amazing.

Re:Lack of promotion? (3, Insightful)

shadowrat (1069614) | more than 3 years ago | (#32980660)

Exactly. There's probably nothing wrong with selling a phone online. You just need to advertise it. The kindle is only available online (i think). It's an expensive tech toy that hasn't failed.

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.

C'mon! (0)

Anonymous Coward | more than 3 years ago | (#32980480)

Really, did they learn their lesson? If it was a lack of physical presence, then why didn't they distribute the phones to commercial sellers? I mean, if this was the sole and only flaw of the phone, what prevented them from selling it this way?

Online isn't the problem, it's carrier subsidies (4, Insightful)

Andy Dodd (701) | more than 3 years ago | (#32980486)

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.)

I'd mod you higher, but you are maxed. (1)

maillemaker (924053) | more than 3 years ago | (#32980842)

You hit the nail on the head.

What Google's exercise shows is that unless you get cooperation with the wireless carriers to subsidize your phone, it's not going to sell. The article says that the phone cost $529. There is no way I would spend that much money on a telephone.

Re:I'd mod you higher, but you are maxed. (1)

CohibaVancouver (864662) | more than 3 years ago | (#32980996)

There is no way I would spend that much money on a telephone.

?!?!

As many others have said, people do this all the time - They just spread the cost over their three year 'contract.'

Re:I'd mod you higher, but you are maxed. (0)

Anonymous Coward | more than 3 years ago | (#32981016)

So do what I did - buy an N1 and an iphone, take the sim card out of iphone, put it in the N1, and sell the iphone on ebay.

Re:Online isn't the problem, it's carrier subsidie (1, Insightful)

Anonymous Coward | more than 3 years ago | (#32980848)

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.

USA subsidising model (5, Informative)

DrYak (748999) | more than 3 years ago | (#32980882)

To be more precise, it seem to be that the problem stems from how the subsidizing is done in the USA :
- Carrier get exclusitive arrangement on certain model.
- Said model is only available at their (physical or online) store
- The only way to get a subsidised phone is through these stores.

This pretty much fucks up the market, because you don't get a free choice of service provider and phone. You pick one and you'll be restricted for the other.
And a phone without an exclusivity contract has just no choice.

Contrast the situation in several European country (including Switzerland, for a precise example) :
- Service providers don't give a damn about exclusive phone models. They compete purely on services and data plans.
- Phones are available in various shops depending on what the store's suppliers has, not who has signed an exclusive contact with whom.
- Thus most major phone companies (Nokia, Motorola, SonyEricsson, Samsung) are available in most shops (mostly in brick and mortar shops)
- Some shops could even import less known brands (Palm, Google, the first Android based HTCs, etc.) (mostly imported in computer-parts shop and other shops for technically savvy people).
- Subsidising is done at the shop level : You subscribe to or extend a contract with the service provider of your choosing available in said shop, and the provider will give a rebate that you can redeem on any phone of your choosing (as long as the phone is also in this shop's catalog)..
- Phone and service aren't linked. Service providers don't give a damn on which phone you used their rebate, as long as you sign a contact with them.
- You can actually use the Phone with a different SIM or even offer it as a present to your significant other, etc. (no SIM lock).
- As long as you keep the contact for said duration the provider is happy, they'll only get annoyed if you cancel the contract prematurely (you'll have to reimburse a part of the phone depending on how early you cancel).

Results :
- Phones from big companies have all their chance.
- Phones from less known companies can still get sold in some quantities through smaller shop specialising into import from those compagnies.
- Service provider have to concentrate on providing good services, because that's the only criterium they compete on.
- No phone company can hope to get away with shitty service just because the sell some magic Jesus-phone. If the service sucks, the users will simply get the phone with another service provider.

Re:Online isn't the problem, it's carrier subsidie (3, Informative)

zaffir (546764) | more than 3 years ago | (#32980888)

TMobile's unlimited everything no-contract plan was $20/month cheaper than the subsidized plans, making the unsubsidized N1 cheaper than one under contract over 2 years.

Re:Online isn't the problem, it's carrier subsidie (0)

Anonymous Coward | more than 3 years ago | (#32980942)

Just because you don't know about the discounted plans doesn't mean they don't exist. It just means you're ignorant.

I like buying phones directly (1)

drolli (522659) | more than 3 years ago | (#32980490)

However i usually buy them from companies focusing on HW.

Re:I like buying phones directly (1)

ahow628 (1290052) | more than 3 years ago | (#32980730)

It was made by HTC. I don't think you get much more HW oriented than that.

Not so fast (0, Flamebait)

ceraphis (1611217) | more than 3 years ago | (#32980514)

I doubt it had to do with it being available online. I think, rather, that the whole "let's share green pixels or whatnot that made the screen blurry on text and such made it's way around enough that people just didn't want it. Everywhere I looked at comparisons between the nexus 1 and other phones pointed out the blurry OLED screen issue as well as the greenish hue to images.

Couldn't even buy it online (0)

Anonymous Coward | more than 3 years ago | (#32980528)

In Australia, we couldn't even buy the phone from Google, only having to wait months for it to be on offer through Vodaphone Australia instead. However, we've moved onto other phones in the meantime.

Not from the source (1)

Aladrin (926209) | more than 3 years ago | (#32980542)

This is about the billionth time I've heard that Google failed at this, and not one of them has a quote from Google about it.

They are assuming that Google's intention was to revolutionize phone sales. Perhaps they had other goals, instead? Perhaps they were successful and no longer need to sell them directly. Perhaps they failed and are stopping.

We Don't Know.

Re:Not from the source (1)

thePowerOfGrayskull (905905) | more than 3 years ago | (#32980720)

Perhaps they had other goals, instead?

For a moment I thought that said "other goats, instead" -- to which I would have said something incredibly witty.

But you didn't, so I just wasted my time.

Re:Not from the source (2, Insightful)

txoof (553270) | more than 3 years ago | (#32980790)

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:Not from the source (1)

bonch (38532) | more than 3 years ago | (#32981130)

Well, of course Google isn't going to come out and say their product failed. Customers and industry observers judge it as a failure.

Why are we still obsessing over this? (2, Insightful)

hkmwbz (531650) | more than 3 years ago | (#32980560)

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?

Re:Why are we still obsessing over this? (0)

Anonymous Coward | more than 3 years ago | (#32980794)

That, and it was rather expensive.

No it fucking wasn't. It was exactly in line with other unlocked smartphones, and significantly cheaper than an unlocked iPhone.

Just because Americans are used to getting a phone for a massive discount then getting reamed for two years doesn't make a normal unlocked phone "expensive".

Jumping to Conclusions? (2, Insightful)

stagg (1606187) | more than 3 years ago | (#32980564)

That's a whole lot of confusions, based on one case study. I'm not saying they're wrong, just that we need more data for these findings to be convincing. I'm always dubious of analysts selling opinions as facts. This is editorial, not news.

Was it really a failure? (5, Insightful)

jpmorgan (517966) | more than 3 years ago | (#32980576)

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:Was it really a failure? (0)

Anonymous Coward | more than 3 years ago | (#32980800)

umm, im pretty sure the N1 was available in both ATT and TMO varieties last time i checked the page google had up selling them.

Im pretty sure the issue is as people have already posted, the unsubsidized price.

TMO is the only carrier that offers a discount to bring your own hardware users, albeit a $10 a month discount that really isn't heavily advertised what its all about.

It is their Even More Plus plans. These are no contract plans with the discount since hardware isn't subsidized you either provide your own, or buy TMO hardware at full price.

Otherwise the plans are 100% as functional as the post paid plans you are familiar with

Online sales dead? (1)

rumith (983060) | more than 3 years ago | (#32980578)

In the US, maybe. In most other countries, not quite. E.g. in Russia you can get as much as 15% off the retail price, so most expensive and cutting-edge hardware is bought online. Last time I checked, Nexus one was both expensive and cutting-edge :)

Re:Online sales dead? (0)

Anonymous Coward | more than 3 years ago | (#32981098)

Whether they end up buying online or in a store, I think more people want to see the phone in person and try it out before they buy it. That wasn't an option with the Nexus One

Not True (1)

whisper_jeff (680366) | more than 3 years ago | (#32980584)

The bottom line is people like to look at phones in the store.

Not true. I'm sure we can all think of at least one, if not a couple of examples that prove this to be utterly false.

The lesson Google should have learned, but apparently didn't, is that people trust hardware from a hardware company but are far less likely to trust hardware from a software company (*). Look no further than the company Google has been waging war with the longest - Microsoft. They have had one "success" in transitioning to hardware in the XBox (quoting "success" because that's highly debatable, I realize) and a large number of high profile failures (or outright flops...). The effort of transitioning from software to hardware is difficult and Google ran, face first, into a very steep learning curve.

*Yes, I know that the phone wasn't actually made by Google but that is certainly the perception amongst the vast majority of consumers.

False indeed! (1)

sshirley (518356) | more than 3 years ago | (#32980600)

I gotta tell ya, I loved my Nexus One buying experience! I really like looking at specs on hardware, making my decisions, and then buying online. I suppose that the process itself isn't any different than doing that in a store. But I prefer my shopping online. I did do the T-Mobile subsidy, but I still bought from Google. At the time, the hardware specs were far above any other handset being offered and that was enough for me to buy. Seeing a lesser model in a store but being able to have it in my hands that moment, wouldn't have given me enough warm fuzzies to buy it in a store. I personally liked Googles method and would purchase it again if there was an upgraded model in the future.

Re:False indeed! (1)

Beyond_GoodandEvil (769135) | more than 3 years ago | (#32980746)

I also enjoyed my Nexus One buying experience. As for failed experiments, I guess that depends on what the goals were. Since the N1 hasn't been abandoned like other new phones that didn't sell well(cough Kin cough), I will happily continue to use it until the whole world goes to 5 or 7G technology. But really, the lack of a subsidy is probably what hurt(joe sixpack buying one) the most along with other operators bugging out and going elsewhere.

Missing the point (1)

deep9x (1068252) | more than 3 years ago | (#32980622)

This seems like the wrong point to come away with from the Nexus Experiment. You don't see Amazon, or even any other carrier, ending their cell phone sales online. The Nexus failure seems to be a lack of marketing and direction. It's a hell of a device for an entusiast and developer, if it were presented that way, or even sold as an unlocked dev phone (Which is still fucking isn't!) it would have done well. I just got mine a couple weeks ago, and I love it. And am ridiculously glad I got it in before they closed.

Bad Screen (0)

Anonymous Coward | more than 3 years ago | (#32980638)

I was hoping the direct model would work, even planning on purchasing one myself. The fatal flaw of the Nexus one for me was the bad screen.

Carriers sell online (1)

jamesl (106902) | more than 3 years ago | (#32980640)

... selling a phone direct to consumers online is dead. The bottom line is people like to look at phones in the store.

Which is why most (all?) carriers sell phones online. I think Apple manages to sell a few iPhones online as well.

wtf? (0)

Anonymous Coward | more than 3 years ago | (#32980678)

Both linked phrases point to the same article.
wtf?

From TFA, supposedly talking about the buying-a-phone-online experience:

...smartphones are not right yet for web access

wtf?

Another questionable comment from TFA:

[The Nexus One] also could not differentiate itself from other smartphones.

Maybe not to dumb people, but the N1 is a boon to anyone who wants to run the latest version of Android OS without waiting ages for MotoGalaxySenseBlurX to catch up.
The article makes a lot of false assumptions about what the phone was in Google's eyes in order to arrive at the conclusion that it was a failed experiment. So...wtf?

Economy (1)

slyrat (1143997) | more than 3 years ago | (#32980694)

I am betting that at least part of the lack of sales has to do with the economy. I myself wanted one but didn't get it because of that. It is hard to assume that direct phone sales are dead when you only have one example of it in the US....

fu*k the keyboards (0)

garompeta (1068578) | more than 3 years ago | (#32980710)

Honestly those who are still crying for a keyboard are idiots who haven't tried the Nexus One. I can type 10 times faster since there is no physical resistance to my fingers, no extra energy on pressing a button down, and this particular difference is reflected in a huge speed increase. Even if I mistype it, Nexus One corrects it by considering statistically the correct word. Even if I mistype in purpose, it corrects 100% of vernacular usage. I am so fucking glad it doesn't have a fucking keyboard.

direct buying isn't the problem... (1)

GI Jones (21552) | more than 3 years ago | (#32980728)

How many iPhones, HTC EVOs and other early adopter phones are purchased without ever touching one? I bet it is the majority. The inability to touch and hold the phone wasn't the problem, the problem was that we live under a cell phone system is is based on phone subsidization and multi-year contracts. If a phone could be purchased at full price and a phone service could be paired with it that didn't carry a subsidization premium, they might have done much better. Bottom line is that Americans don't like paying a premium for a phone unless it is made by Apple.

Strongly Disagree (1)

irotsoma (899537) | more than 3 years ago | (#32980786)

If the Nexus One truly "failed", which is debatable since it essentially is sold out in the US so they sold what they made, then it wasn't because it was sold online or because people want to touch the phone before buying. There are plenty of places to buy phones online. I have bought almost all of my phones online. The problem is that it was too expensive because they were only subsidized by T-Mobile, and only if you signed on for a really expensive monthly plan. People these days are used to getting phones for free or almost for free. Also, the biggest selling point of the Nexus One, in my opinion, was the fact that it is controlled entirely by Google. Thus you get updates first without having to wait for the carriers to get around to them, and you get the openness that is Google. That selling point really only hits home with the geeky users that want a customized experience along with a simple physical design. I think the Nexus One is one of the best phones out there right now, but I know that it's not for everyone and the fact that it's so expensive really limits it's audience even more. Thus, I first don't think it's a failure, but even if you believe that, the failure wasn't because it was sold only online.

I wouldn't say it was a failed experiment. (1)

Cyblob (800812) | more than 3 years ago | (#32980808)

They used the Nexus One as an experiment to see how consumers reacted to buying smart phones directly and found that they preferred buying from carriers.

The experiment was a success as they now have an answer with data to back it up: consumers prefer buying from carriers.

Collector's item? (1)

sprale (1759936) | more than 3 years ago | (#32980816)

Grand idea, but it will be cool to find one in a file cabinet in a decade, a collectors item to be sure.

Lack of support (1)

rdesh (1861336) | more than 3 years ago | (#32980824)

There are many reasons, like it was expensive, and contracts based. But the principal reason is the lack of support. When there is no customer service number to call ( at-least in the beginning), you are doomed. It was a major strategic blunder to rely on the e-mail as a form of customer service and not setup any adequate support framework. A half-baked and naive idea.

A lesson ill-learned (0)

Anonymous Coward | more than 3 years ago | (#32980826)

I don't think I'm alone in buying 4 different generations of iPhone, sight unseen. Perhaps it's not the "seeing in the store" that's the issue.

One problem... (1)

GWRedDragon (1340961) | more than 3 years ago | (#32980834)

...lack of Verizon support. In a lot of places, at least here on the east coast, Verizon is the only carrier with near-universal coverage. It doesn't matter how cool a phone is if it drops calls all the time and has crappy data speeds.

If I had a dime... (1)

davidannis (939047) | more than 3 years ago | (#32980868)

If I had a dime for everything that would "never work online" that has since gone online, I'd be a rich man. Shoes, clothes, and jewelery, all are sold online and they were supposed to be too tactile too. I remember a company that refused to let me build their website in 1997 because a consultant told them that the Internet was too insecure for "real business." He laughed when I predicted that one day he would bank online and convinced them to private label a dial in BBS instead. I built their website a year later. BTW I pre-ordered my Motorola Droid sight unseen so I could get it on the release date.

Fear, uncertainty, and doubt (3, Insightful)

adbge (1693228) | more than 3 years ago | (#32980934)

This article is a truly atrocious fluff piece. I would be better off reading my sister's blog.

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:Fear, uncertainty, and doubt (1)

blair1q (305137) | more than 3 years ago | (#32981116)

Schmidt knew things like the Droid were coming. He's spinning.

Google wanted to make money on phones and have control of a device for its OS. It wanted to be like Apple, making $jilions on the iPhone, but with more user and developer freedom. It's spinning now, taking success where it can get it, and claiming that getting its ass beat by other phones using the same OS was what it meant to do all along.

The online-sales model would have worked fine except for one thing: the phones didn't work very well for a lot of people. Because of that, people interested in them would have needed first-hand experience with other features of the phone to get that it's still pretty cool even if it's middling for signal and 3G connectivity.

The combination of features worthy of trepidation and a lack of a way to alleviate that trepidation led to a lack of sales.

Love my N1. Sorry to see it's going to go into EOL hell. Probably never see an Android 3 update for it (please reply if you know otherwise). But, I bought it outright, and I have no contract on it, so I know I won't lose anything more than opportunity cost if I switch to another phone. Which will, without question, be running Android, and will, in all probability, also be made by HTC.

I heard it wasn't very good. (2, Interesting)

Overzeetop (214511) | more than 3 years ago | (#32980948)

Look, I was up for a new phone this summer (AT&T isn't going to cut me a break on my rates, so I'm going to get a new fucking phone every 18 months, even if that means I immediately flip it on eBay). WinMo is no longer viable - there are android and iphone apps for everything the WinMos had a lock on two years ago, and I wanted a finger interface. W7 will not be ready in time.

I considered both android and iPhone, and did a bunch of research on them. For all the limitations of the iPhone, none of them mattered to me that much. I would miss tethering, but I only used it 4-6 times per year. The Nexus One was intriguing, but - by Android users own admissions it fell short. The touchscreen was inferior to the iPhone (a big point of contention with my old WM, and one of the things I really liked on my wife's iPhone). A standout feature was the notification light...but it didn't work as planned, and Google appeared to have abandoned ever making work. And, honestly, I couldn't play with one before stroking a check for $600.

I got an iPhone 3, liked it, and upgraded to a 4 for the speed and camera (which is very good, btw). Sold the 3 for within $20 of what I paid. Now, I'm not very happy with the 4, or Apple in general, since the 4.0.1 update bricked my phone and Apple had no answer on how to fix it. Thank goodness for mac hackers or I'd be at an AT&T store asking them to replace my !@#$ @#$#% phone with something that worked. I shouldn't have to troll the mac equivalent of XDA to get my never-jailbroken, never-hacked iPhone to do a simple update.

I'm still in the market, but AT&T android handsets are crippled, the new Moto android handsets are hobbled and Verizon wants $30 more poer month for their service (which is no better than AT&T near me), and everyone else coverage makes AT&T's map look continuous. The Nexus was nice, but now it's gone, and there's no push to get a better android phone, just a fatter spec sheet. I was hoping a N-2 might be in the offing, and a real phone shootout would ensue in my house. Guess not.

Re:I heard it wasn't very good. (0)

Anonymous Coward | more than 3 years ago | (#32981042)

Stop trying to make excuses. You wanted an iphone all along, just admit it to yourself and get on with life.

ADP3? (1)

Captain Spam (66120) | more than 3 years ago | (#32980976)

Maybe Google would've done better with it (or could do better with it NOW) if they scaled back their expectations massively and made it the ADP3? I mean, the ADP2 (unlocked MyTouch) is getting woefully outdated in terms of modern Android development. Plus, the N1 already IS largely an ADP (not entirely, but largely).

They really should get a Froyo-capable and higher-powered ADP3 for developers soon anyway, come to think of it. A lower-production line of N1s could do the trick nicely.

Nexus One did the job it was designed to do (1)

DJ Wipeout (139210) | more than 3 years ago | (#32981018)

The "customer" for the Nexus One was not just the cellular phone user, it was every HW manufacturer. For manufacturers it showed what Android could do. If you look at all the phones released prior to the Nexus One, the hardware specifications were very similar in terms of performance, which let's be honest, was not super awesome. Once the Nexus One came out, the specs for subsequent phones jumped to match it and surpass it, and adoption of Android phones exploded. It's not clear that jump would have happened if not for the Nexus One. With approximately 135000 sold by March, let's assume a total inventory of 150000 phones. At an estimated $175 manufacturing cost, that's $26.25 million. Given the massive explosion of phones and subsequent sales (and search revenue!) The cost of the Nexus One is nothing compared to Apple's advertising budget ($500 million in 2009). Even if you were generous and assumed Google spent $50M on the Nexus One as a whole, that's still only 10%. Sounds like Google made a smart move to me.

The Nexus was the best phone purchase I ever made. (3, Interesting)

joedoc (441972) | more than 3 years ago | (#32981066)

I began considering the Nexus when Google first introduced it. Like most others, I was unsure because of the $529 price tag. My wife and daughter were also in the market for new phones. Having already owned an HTC G1, the question of Android performance was never an issue (I paid full price for that phone, too).

The issue for me was contracts. My contract with T-Mobile had expired, and I wasn't willing to lock into another one. T-Mobile had also just introduced some new no-contract plans, so I did some math.

I ran the numbers for getting a two-year contract with two new MyTouch 3Gs at the $149 subsidized price. I wanted an unlimited everything plan. Then I looked at the same idea, only I'd buy the MyTouch phones at retail ($399 each). with their no-contract Even More Plus plan. Over the course of the same two years, I would pay $500 *less* for the phones and the service, without a lock-in. Not only that, T-Mobile made me a great offer: if I purchased the phones in a retail store, I could pay $20 down on each, plus the sales tax (about $50 total for both phones), and then pay the phones off at $20 per month each, added to my bill, with no interest. I could pay off the phones at any time.

That $500 savings justified the cost of the Nexus. The girls love their MyTouch devices, and the Nexus is probably the best phone I've ever owned. I've already rooted and modded it. Buying it unlocked was a plus, especially when I traveled to Europe a few weeks ago: slip in a local SIM and off I went.

Perhaps I'm fortunate in that buying the phone at full price is something I can do, but the sales model is something that makes sense. I can see this becoming more common in the future: manufacturers create the devices, make them workable on multiple carriers (especially for data between AT&T and T-Mobile in the US), sell them unlocked and let people just pick a carrier and buy a plan.

Then again, I know what I want. I don't necessarily need to touch something to see it's value.

Maybe it had to do with... (1)

cjjjer (530715) | more than 3 years ago | (#32981082)

The fact that nobody wanted to buy a phone (other than geeks) from a search engine company. Lets face it, that is how the majority of consumers see Google, as a web page they search from and that's it. Even though the phone was made by a reputable company it was sold as the "Google Nexus One". Would you go out and buy a "Asus Mirage" a (fictional) car built by Ford for Asus? Probably not...

I disagree (1)

DragonTHC (208439) | more than 3 years ago | (#32981084)

At that pricepoint or locked into a contract as such, I think the program was a smashing success.

Has nothing to do with seeing the phone (1)

hawguy (1600213) | more than 3 years ago | (#32981102)

I agree with the other posters that doubt that it has to do with consumers seeing the phone first. There are three reasons why I didn't buy the Nexus one:
  1. It was on T-mobile rather than being on Verizon (or even AT&T)
  2. Buying an unsubsidized phone gives very little benefit - it's not even clear that the plan is cheaper if I buy an unsubsidized phone.
  3. No keyboard (but that's just my personal preference)

Now, when the Motorola Droid was released, I bought it on opening day -- I didn't even see the phone until the sales rep took my phone out of the box to activate it. I bought my last 2 phones online and didn't see them in person until they arrived. I'm definitely in the target market of the Nexus One, but my decision to not buy the phone had nothing to do with whether or not I could see it first.

Everyone forgets the G1.... (1)

grocer (718489) | more than 3 years ago | (#32981112)

Or Google's first phone, which they sold in stores, thru T-Mobile, under contract, like the iPhone. The Nexus One appeared as follow up to the G1 and basically set the bar for Android 2.0 devices. Considering Google sold every unit of the Nexus One and pushed the bar further for Android devices, I think it was a success...they weren't looking to take on Apple in units sold, just in phones running their OS and the Nexus One set the standard by which Android 2.0 devices were measured.

Just ordered mine on Monday (1)

MrJynxx (902913) | more than 3 years ago | (#32981114)

I've been an avid iPhone user for the past few years. Was just about to grab the iPhone 4 up in Canada when it's release next week but I already had iOS 4 (mildly jailbroken) on my 3g and in all honesty, I wasn't overly impressed. While it did implement the much need multi-tasking I always felt locked and when I did fiddle with other jailbroken apps (OS 3 + 4) I found the performance went to hell.

So a few weeks back I saw the Nexus One won't be offered anymore and I did a bit of investigating and realized just how open Android really is. So I ordered the phone on Monday after hearing the last shipment is abound and when I went to check the status this morning it appears they're already all gone.

That being said, I am not hating on the iPhone at all, and I will miss my iPhone. But I'm willing to forgo the well thought out "eco system" with Apple to something a bit more robust and open. I like to fiddle, jailbreaking allowed me that, but I still felt locked in.

Also our phone plans in Canada absolutely suck, I'm locked into my contract with Rogers until mid next year so I could buy the iPhone at $300 and I'm certain they'll say I can't get an early upgrade (couldn't do it with the 3GS!!). So 300 vs 550 unlocked and I can leave Rogers whenever I want(after my damn contract is up :) ) is money well spent.

Typical Google (1)

Lysol (11150) | more than 3 years ago | (#32981128)

Which isn't necessarily a bad thing. Like other projects, Google throws things at the wall to see what sticks. I'm sure the idea going around last year (remember, the Nexus One was a little bit after the Droid, so the idea of a 'Droid success' had not yet been covered in the press) was 'mimic Apple, they have the hot ticket'. Microsoft is doing this right now to the point that it's almost ridiculous.

So for Google, Nexus One had its day and that's it - many others are succeeding with Android now and since Google gets all search revenue from it, it's win/win for them. And lets be honest, this was a geek phone, nothing else, so I'm sure the sales numbers weren't that spectacular.

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