Nexus One's biggest challenge isn't iPhone; it's Google's online-only sales model

If Google wants to advance Android and put devices like the Nexus One up against the iPhone, Sam Diaz say it needs to dump the online-only sales model.

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.

For a while now, I've been waiting for the iPhone to make its way to Verizon. I've been out of contract for a while now but had been holding out for the iPhone before signing up for two more years under the Verizon plan. The wait for the iPhone got pretty old, pretty fast so I'm kind of over that already. Waiting for iPhone, I got used to using Android devices - and I'm pretty much sold on the experience.

I wasn't much of a fan of the Motorola Droid -- not because it's not a good phone but because I don't care for the bulkiness of slide-out physical keyboards. I prefer the touch screen, which was one of the things I found appealing about the iPhone. Maybe that's why I took to the Nexus One (for T-Mobile) during my trail period with it.

Now, here's where I'm stuck: I had every intention of signing up with Verizon for two more years when Google announced that the Nexus One would be available on Verizon's network in the Spring - now just days away. But now I'm having second thoughts - quite frankly - because I don't want to buy it from Google. I want to buy it from Verizon.

Googling Google: Google's online-only phone selling model has failed

It's not that I like one company over the other or that I'm anti-ecommerce. Plain and simple: Verizon has a store - an old-school bricks-and-mortar store with real employees, people who I can talk to face-to-face when things go wrong, people who can reset things or swap things out or even suggest a good cover for the device.  These stores are convenient, littered about the cities everywhere, with locations always within driving distance of where I am.

You see, I'm an instant gratification kind of guy (it's one of the reasons I carry a smartphone.) If something needs fixing or replacing, I'm hopping into my truck and heading to that store so someone can get it fixed or replaced right now. I'm not looking to send off an e-mail help ticket and wait for the UPS driver.

Also see: Google, Nexus One and the customer service risk

I've said it before and I'll say it again. Google should not be in the business of selling smartphones. Develop that software, integrate those other tools, enhance the user interfaces and, yeah, give more than two cents when it comes to things like design and pricing. But leave the sales, marketing and support to the carriers. (Oh, and don't even get me started on the that whole separate equipment recovery fee that Google charges - in addition to what the carriers charge.)

Also see: Google's $350 ETF makes sense to bean counters; Annoys customers

Sure, Apple does all of that and more - but that's Apple. Google should focus on what Google does best and leave all of those other details to the manufacturers. To try to take on too much will only slow down the momentum. In a post late yesterday, Garett Rogers points to a Goldman Sachs report that reduced sales estimates of the Nexus One for 2010 - from 3.5 million down to 1 million.


The reason? The reports says that one possibility is "limited marketing and customer service challenges." Google can benefit from a launch with multiple carriers - both in the U.S. and overseas. Assuming that 1) Google rolls out a second handset, 2) markets it more aggressively and 3) makes it available offline, then it can potentially sell 2 million per year in 2011 and beyond, the report said.

If anyone over at the Googleplex is listening, for what it's worth, I'd much rather walk into a Verizon store later this month so I can walk out with a new Nexus One - up and running today, not arriving via UPS tomorrow.


GOOGLE is set to launch their phone product(s) all over the world and thats the only reason they sell it unlocked and have not tied up with any specific provider.The US is not the only market where such products sell. Its a perfect model. They do all the marketing they want, build up hype (similar to the iphone hype) and anyone who really is entusiastic about having a NEXUS will wait till the sun goes down to get one. No uncessary complicated agreements/contracts with carriers,no silly retailer price wars. They get all the feedback from the users directly and can work their way, improving their product.


The problem is not the online sales model either, lots of companies are successful selling products online. The problem is the lack of an online support model, where only FAQ's and support forums are not sufficient. Consumers need someone to talk to when things go wrong and there needs to be return/exchange processes in place as well.


Their strategy is to push the playing field in a direction that better suits their core business, which is providing advertisements online. The US cell phone industry needs regular kicks in the pants to keep it humming, otherwise we'd still be playing Old Snakey on our monochrome Nokias. This is the same strategy being employed against US broadband providers with the upcoming "Google Fiber" project, and has been successfully employed with Gmail, among other services. They're not interested in selling a phone, they're interested in pushing the marketplace.

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