Nexus One: Failure or Late-Blooming Phenom?

Slow and steady may work for the tortoise against the hare, but sluggish sales of Google's Nexus One smartphone has the blogosphere calling its approach a failure.

The latest Nexus One sales stats come courtesy of mobile computing market research firm, Flurry, which decided to take the pulse of Nexus One sales at the 74-day mark. Why 74 days? As Peter Farago, Flurry's vice president of marketing put it in his blog entry, it took Apple (NASDAQ: AAPL) 74 days sell one million units of the original iPhone back in 2007.

Google, meanwhile, has sold only about 135,000 Nexus One units, according to Flurry.

"The comparison is interesting because the iPhone and Nexus One each represent Apple and Google's first fully branded handsets, respectively," Farago wrote in his blog post.

And you can't blame Android for the Nexus One's anemic sales, since the Google-backed mobile OS has proven a winner in phones by other companies. In 74 days, for instance, Flurry said Motorola (NYSE: MOT) sold 1.05 million Droids.

"We add[ed] the Motorola Droid as a point of comparison, and because it's the fastest selling Android phone to date," Farago said.

Nexus One Strategy Still Shaking Out in Mobile Device Marathon

Flurry did note that the Motorola Droid benefited from Apple's early efforts to sow the seeds of consumer interest in smartphones; that Droid is on Verizon Wireless, a much larger carrier than Google's own primary partner, T-Mobile; that Motorola launched a $100 million ad campaign to push Droid; and Droid came out ahead of the holiday shopping season, while the Nexus One debuted afterward. And perhaps most critically, Google opted to only sell the device through its own Web site, rather than in stores like the iPhone or Droid.

"Google Nexus One may go down as a grand, failed experiment or one that ultimately helped Google learn something that will prove important in years to come. Apple's more vertically integrated strategy vs. Google's more open Android platform approach offer strengths and weaknesses that remind us of PC vs. Mac from the 1980's," Farago wrote.

The blogosphere, on the other hand, wasn't so measured. The Nexus One Is A Flop declared Silicon Alley Insider. Not to be outdone, Gizmodo said The Nexus One Is a Total Flop. GigaOm was a little more tactful, with Lessons in Phone Marketing, or Why the Nexus One Is Sucking Wind, while The Register once again provided the best snark, with the story Googlephone sales top, um, 135,000 -- Only 865,000 behind the Jesus Phone, a reference to the iPhone and the near-religious fervor it's inspired.

A spokesperson for Google declined to address Flurry's findings, simply issuing a statement to InternetNews.com that said, "We're pleased with our sales volumes and with how well the Nexus One has been received by our customers. The Nexus One is one of a fast-growing number of Android handsets, which have been brought to market through the open Android ecosystem. Our partners are shipping more than 60,000 Android handsets each day compared with 30,000 just three months ago."

Google Inventing Own Smartphone Sales Channel

But could those figures be exactly what Google wants? Avi Greengart, research director for mobile devices with Current Analysis, thinks they just might -- and points to the search leader's online-only sales strategy as proof that it has an approach in mind different from its rivals.

"If you're looking for mainstream consumer numbers along the lines of an iPhone, BlackBerry or even a Palm Pre, then yes, you want to have your product available in locations where consumers actually shop," he told InternetNews.com. "But that's not been Google's approach. Google is trying to create a new sales channel. So it's finding that it's relatively slow going at first. In terms of unit sales for a high-end smartphone, that's not bad."

Greengart has repeatedly compared Google's marketing -- limited to a few links on its home page -- to Amazon's aggressive marketing of the Kindle, which is everywhere if you visit the e-commerce giant's site. He believes Google is trying to walk a tightrope of prodding the wireless carriers into supporting Android wholeheartedly without putting them off.

"It could be one of the goals of the Nexus One is Google wants to insure carriers don't offer lowest common denominator [Android] product, and one way to do that is put some competition out there and offer high-end devices. That may pressure carriers for something comparable so they don't lose their highest-value customers to a different sales channel," he said.

Verizon does have the Motorola Droid and HTC Eris, but not all Android phones are as impressive. Google "may be more interested in influence than sales numbers, keeping carriers honest by offering phones comparable to the Nexus One," Greengart said. "But if they push too hard, carriers might abandon Android."

Separately, Google announced an AT&T phone, which was expected after sleuths found hints of it at the FCC site, and that the phone would be available to Canadians through Rogers Wireless.

Andy Patrizio is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.

TAGS:

Google, Android, smartphone, nexus one, mobile device

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