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Was Google expecting to sell many Nexus Ones?

by Scott Bicheno on 16 March 2010, 18:15

Tags: Google (NASDAQ:GOOG)

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Android buzz

Google makes most of its money from advertising around its free cloud products, principally search. For this model to be most effective it needs as many people using its cloud products as possible and it's not going to achieve this by doing an Apple and creating its own, closed range of handsets.

The very nature of Android has been to include as many partners across the mobile phone ecosystem as possible via an open source platform. When we first heard it was going to produce its own handset we wondered what all the Android partners were going to feel about being frozen out. Also, by choosing HTC for the Nexus One, it risks alienating other OEMs and HTC risks cannibalizing sales of its many smartphones, an increasing number of which are Android-based.

We reckon Google must have had to reassure its partners that it wasn't trying to compete with them, in spite of all evidence to the contrary. The only way we can think of that it could have pulled that off is to stress that it wasn't trying to sell loads of Nexus Ones and that it will ultimately benefit all of them by increasing interest and buzz in the Android platform.

Look at some other evidence. How much marketing support has there been behind the Nexus One. Google has got deep enough pockets to launch a massive above-the-line marketing campaign if it wants to, but it hasn't. Google was even giving away hundreds of them for free to developers at MWC.

We had a play with the Nexus One for a while recently, and the first thing that struck us was that everything about the phone is geared towards getting you set up on the Google cloud. It even offers a quick start-up guide and one of the first suggested steps is to register with Google.

So, while this could just be a relatively bungled effort to do an iPhone - and Google is by no means flawless when it comes to product launches - we think it more likely that the Nexus One and its subsequent siblings are designed to demonstrate the capabilities of the latest version of Android, contribute to its ongoing development, and generate Android buzz.

 


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HEXUS Forums :: 2 Comments

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Posted by nichomach - Tue 16 Mar 2010 19:45
Well, they haven't risked much in terms of promotion - the press has been doing all that for them for months without any input from Google other than “Look! We're making a phone - maybe” and “Look! We're making a phone - definitely”. Hardware development costs aren't that high - it's another HTC smartphone, just rebranded, so really no more work than HTC have done on various Winmobes for operators like O2 and AT&T. It's a capable, well made device, although I'd argue no more so than other ‘droid phones that have been released, and it’s probably already well in excess of covering its cost. Even if it is just a technology demo, it's likely to be a profitable one.
Posted by Stringent - Wed 17 Mar 2010 09:43
Don't forget that its not widely available or subsidized by many networks. You either have to be in the US to get it on a contract, or buy the phone outright. Despite the charges operators now throw and lock you into when buying a state of the art (so called) smart phone, like 24month contracts, people still go after ‘free phone’. If this was free and more widely available then I think the uptake would be quicker and more purchases. But considering you pay around £450ish for the privilege, a lot of people will be put off by that.

However I am guessing Google did it this way as they are slowly introducing themselves into the market. Sort of testing the water, build up relationships before they do make the Nexus One or even their next phone whatever whenever that is more accessible.