Money Matters - Simplified

Google Nexus One to arrive in stores soon; web store to shut down

Ever since Nexus One’s launch in January, search giant has refrained from revealing the sales figures of its smartphone. But market analysts suspect that smartphone did not sell as expected.

Google Inc. on Friday announced via a statement that it will soon start selling its Nexus One smartphone through retail stores and will shut down the online web store.

Google’s vice president of engineering Andy Rubin wrote on company’s official blog posting: "As with every innovation, some parts worked better than others. While the global adoption of the Android platform has exceeded our expectations, the Web store has not.

Google used the web store to directly sell its smartphone to the customers without any interference from wireless carriers.

But the company seems to realize the importance of retail experience, probably after seeing the poor sales of its smartphone while its Android platform is quite popular.

Rubin added, “It remained a niche channel for early adopters, but it’s clear that many customers like a hands-on experience before buying a phone, and they also want a wide range of service plans to chose from."

Rubin revealed company’s plan further on his web posting: "Once we have increased the availability of Nexus One devices in stores, we'll stop selling handsets via the Web store, and will instead use it as an online store window to showcase a variety of Android phones available globally."

Google needs to find a carrier for Nexus One
Markets experts believe that it’s good thing that Google finally understood consumers’ need for a retail experience before deciding to buy a device. But it still has a long way to go since Google has to find a carrier for its device.

Google used the web store to directly sell its smartphone to the customers without any interference from wireless carriers.

Interestingly, Verizon Wireless and Sprint Nextel Corp. have already refused to support Nexus One on their networks.

Selling Nexus One online a bad idea from the start?
Ever since Nexus One’s launch in January, search giant has refrained from revealing the sales figures of its smartphone. But market analysts are suspecting that smartphone did not sell as expected.

So Google’s decision to start selling Nexus One via stores did not surprise analysts, who were convinced from the start that Google’s revolutionary method is a bad idea from business view point.

Avi Greengart, consumer devices research director at Current Analysis, believes that Google’s revolutionary idea did not take off because from the start not many consumers were aware “that the Nexus One existed in the first place.”

"In addition to being a terrible distribution decision, the online channel seemed to have been designed to (circumvent) carriers — the very partners Google needs to promote Android overall. The whole Nexus One endeavor was a bad idea that should never have been launched in the first place. The only good news here is that Google is reversing course and killing it," added Greengart.