Nexus One Success Hampered by Google Web Store
As the dust and confetti settle in the wake of the Nexus One launch, early reports suggest that Google sold a meager 20,000 of the next-generation "superphone" during its first week. Google's other big launch--the Web-based store for purchasing the Nexus One--may play a significant part in the weak initial sales.
The weak sales can be attributed to a variety of factors. First, Google did nothing to market or promote the Nexus One prior to launch--at least not directly. I am skeptical of product "leaks" and consider the alleged leaks a stealth marketing campaign designed to generate hype and speculation without investing any real marketing dollars.
In the end, marketing-by-product-leak is a sort of win-win for Google. If it works, the media and blogosphere do the marketing on Google's behalf and so much buzz is built up around the device that it becomes a grand slam right out of the gate without Google lifting a finger. If it doesn't work, Google can simply pretend it never "tried" to market the Nexus One, and no money is lost in the process.
The weak sales of the Nexus One can also be attributed to the success of previous Android handsets. While Google may not have put any effort into marketing the Nexus One, Verizon launched an all-out marketing offensive to promote the Motorola Droid prior to its launch. That was only a couple months ago.
The Droid sold more than 12 times the Nexus One in its first week as a result. The fallout of that for the Nexus One, though, is that a quarter million users, who may have been a prime market for the Nexus One, just bought cutting edge Android-based handsets with Verizon. The Droid will get the Android 2.1 update in the near future, so there is little to compel any of them to drop the Droid in favor of the Nexus One.
The biggest handicap to the success of the Nexus One may be Google itself, though. Or, more specifically, Google's "revolutionary" distribution channel for selling the Nexus One. The only way you can purchase a Nexus One is through Google's new Web-based storefront.
I have purchased mobile phones through my wireless provider's Web site--but only after I had gone to the store to actually touch it and test it out. AT&T stores not only have samples of the mobile phones that are available, but the samples even have live SIM chips so you can call to and from the device to test out voice quality.
Google has gone out of its way to create a rich and comprehensive experience for users on the Web site, but many users are still reluctant to spend $530 (the full price for the unlocked, unsubsidized Nexus One) on a device that they can't actually touch or test out first.
The Web store is a handicap that Google can overcome, though. As Google's vision unfolds and it adds more devices and more wireless providers, the idea of a provider-agnostic smartphone purchasing experience may catch on.
Amazon, and the success of the Kindle, is representative of the fact that it is possible to develop a successful gadget based only on Web-based sales. As more users have the Nexus One, their friends and peers can see and touch those devices, and the word-of-mouth marketing can fill the gap left by not providing a brick-and-mortar experience for customers to sample the Nexus One.
The Nexus One has also been plagued with complaints of flaky 3G network connectivity and inadequate support, but those issues came after the fact. The support backlash may explain weak sales for week two, but in the week following the launch users were not yet aware of those issues.
The launch of the Nexus One, and the events that have unfolded since the launch, make my Nexus One predictions seem quite prescient--particularly the one about how the Nexus One will be a missed opportunity for Google.