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Nexus One: Is Google pushing away from smartphone sales business?

Google has shifted gears on its newest smartphone for Verizon in a way that suggests it may be backing off of its effort to sell directly to the consumer.

This is a guest post from Sam Diaz of TechRepublic's sister site ZDNet. You can follow Sam on his ZDNet blog Between the Lines, or subscribe to the RSS feed.

Back in January, Google made a splash over the Nexus One smartphone - summoning the tech press out to the Googleplex for an introduction to not only the device itself, but also a new way of selling it.

You see, Google wanted to reinvent the way consumers shop for and buy cell phones. Pushing away from a model where specific devices are tied to certain carriers, Google had this vision of selling its devices directly to the consumer and then giving them a choice on which carrier to use.

It was a valiant effort but was flawed right out of the gate. First, there were questions galore on who would handle offline sales, support and service - Google certainly wasn't equipped to handle that. Then came the rumblings over what was perceived to be double "early termination fees" - those imposed by the carriers and a separate that would be charged by Google.

Now, the company has quietly made one change to its Nexus One online store that suggests - for those of us trying to read deeper into it - that Google may be backing away from its push into the online smartphone sales business. (Techmeme) For months, its site has been pitching the Nexus One for Verizon as a "Coming in Spring 2010." This morning, the language was changed to read: For Verizon's network, you can buy the Droid Incredible by HTC, a powerful Android phone and similarly feature-packed cousin of the Nexus One.

Below that, there's a link that sends visitors to Verizon's website to place a pre-order.

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Here's hoping that Google finally saw the light and decided to rethink the strategy. One of its biggest flaws was that Google, as a retailer, was becoming a competitor to the carriers that it was also partnering with. The other big problem was that the unsubsidized device carried a price tag that clearly wasn't going to resonate well with consumers - $529.

None of this is to suggest that the current system of mobile phone sales, support and service is model is the perfect system that doesn't need changing. It's gotten better - but consumers do want more freedoms when it comes to buying mobile devices. If those sort of freedoms were in place, I would have bought an iPhone for my Verizon plan years ago.

Instead, I've completely lost interest in the iPhone and instead will likely walk into a Verizon store to pick up a Droid Incredible later this week. And I'll be relieved to actually buy it from a real person and walk out of store with one, instead of clicking on a "Buy Now" link and then waiting for a UPS driver to deliver it later.

There's no shame in trying to rock the boat a bit and Google gave it a good shot. There really wasn't much risk, given the overhead involved with the online store model, so Google didn't have much to lose. Pouring some cash into a marketing or advertising budget might have helped - after all, it helped the Droid gain some traction - but that alone wasn't going to make the online sales model work.

Google needs to stay focused on doing what it does best - enhancing a smartphone OS that will give the iPhone a run for its money, building that app developer community and cutting deals with a variety of device manufacturers and carriers.

That alone rocks the boat enough for me to want to jump on-board.

5 comments
Hazydave
Hazydave

Google's idea was noble, but their implementation flawed. For one, the N1 wasn't really a universal GSM phone. If you are going to sell carrier-independent, then the phone should fully support 3G on T-Mobile, AT&T, and European networks. Next, the price. They came out at a price on par with anyone's unbundled phone. That was necessary to get T-Mo to sell the N1 I'm sure, but it missed the point. Sold at a normal CE price, comparable to iPods and other PMPs, we should have seen it at $350 or less. Bottom line is, they made a good but not game changing phone, and didn't actually do anything to change the business model. And that might actually be ok for the Android world. Android is poised to become the MS-DOS (market wise) of the smart phone world, only even better, given the FOSS nature of the base OS. Google doesn't need to compete with Verizon or Motorola... the need to keep Android ahead of RIM, Apple, and Nokia. (Typed on a DROID)

NeilBoyd
NeilBoyd

Why do you prefer to buy from a "real person"? I don't know how it is where you live, but here in the Netherlands you generally pay ?5 per month extra to have someone sell it to you, compared to buying it online from the same shop's internet site.

Brenton Keegan
Brenton Keegan

I am a musician by hobby and I buy almost all my stuff from a local music store. (I only order online if it's something they just don't deal with) There are several reasons that I do this. First of all, in the world of music, you really need to touch and play something before you buy it (whether it be an instrument or related equipment). Secondly if I have problems with it, or even if I discover I just don't like it I can just take it down the street and return it, no questions asked. I don't have to submit an RMA request, pay to have it shipped out, pay some sort of restocking fee and then wait 2 weeks for it to process and have the new one shipped to me. I also know that I am generally going to be treated well when I walk in the door. Most of the guys at my local music store know me by name. I live a pedestrian lifestyle and one day I wanted to buy a full sized keyboard. One of the guys that worked there gave me a ride to my place with the purchase. Admittedly they don't always match the online price. I recently purchased a piece of equipment for 120 dollars that I knew I could get online for 100 with free shipping. But in the end it comes back to you because on that very purchase of about 400 dollars total they gave me a 10% discount just for the heck of it. So to bring this all back to phones. I'd much rather walk into a store and ask someone to show me the phone. I can actually try the phone out to see if I like it. I can ask the fellow's opinion on the phone. It's a much more informative experience than a photo on a webpage. To me that's worth a couple of dollars.

wdewey@cityofsalem.net
wdewey@cityofsalem.net

I personally like to touch and feel devices like this to actually get an idea of how much I will actually like it. Returning a device purchased on line is much harder than taking it back to a physical store. Bill

Harry.Hiles
Harry.Hiles

...if they stick with developing great software services and platforms. Android is an excellent mobile OS with a great future, but needs further development to keep ahead of competitive products. Android, Google Apps, Chrome Browser and Chrome OS are changing how we use and think of software. Expanding and refining these technologies, along with enabling and empowering developers, will open new frontiers for software applications.

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