So it’s time for Google to call it quits and shut down the Nexus One.
Instead, Google should take whatever lessons it has learned trying to sell phones by itself and use them to help carriers — its real customers — beat the iPhone, BlackBerry, and everyone else.
Because it’s now clear to everyone that the carrier-dominated U.S. phone market isn’t going to crumble just because Google put up a website to sell phones.
The latest: Sprint, the no. 3 U.S. wireless carrier, says it no longer plans to service the Nexus One, and will focus its efforts on another Google phone instead. This follows Verizon Wireless, the no. 1 U.S. carrier, snubbing the Nexus One a few weeks ago.
The big problem: Four months after the Nexus One launched to much fanfare, still only one carrier, tiny T-Mobile, is subsidizing the Nexus One down to a reasonable price.
That is, you can only get a Nexus One for $179 if you want to sign a new two-year contract with T-Mobile. Your only other option is to spend $529 out of pocket — much more than most people would ever spend on a mobile phone — and use it with AT&T.
As a result, the Nexus One had bombed.
What went wrong?
The carriers — which dominate how phones are marketed, distributed, and sold in the U.S., saw Google’s real mission with the Nexus One, and didn’t want to be disrupted. That is, Google was trying to disrupt the carriers by selling direct to consumers, and trying to “own” that relationship. That would have been bad news for any carrier. And because carriers hold all the power in any broader partnership with Google, they largely ignored the Nexus One, focusing instead on other Android phones.
Google did a pathetic job marketing the phone. It’s no secret that TV commercials sell a lot of mobile phones. This is why you see commercials for mobile phones — often terrible commercials and phones — during nearly every commercial break on U.S. television. Yet Google refused to advertise the Nexus One on TV, trying to do its advertising online alone. (In fairness, what was Google going to say? “Hey, buy our $500 phone!”)
Google was cheap. Google also could have spent some of its own money subsidizing the phone, but for whatever reason, it chose not to. It could have invested in customer service, and it chose not to, leaving plenty of room for criticism.
The best news for Google is that Android’s long-term success or failure has nothing to do with the Nexus One. And that Google’s long-term success or failure in mobile — advertising — is not directly tied to Android.
Android has always been about taking a single platform and spraying it across as many phone manufacturers and carriers as possible. That’s happening more today than ever, which is how Android beat Apple’s iPhone in U.S. sales last quarter. And so Google’s REAL success story with Android — a potentially HUGE ecosystem — is still in place.
And that’s where Google should be focusing its attention and investment: On helping as many companies sell as many Android phones as possible, NOT on competing with its partners.
Maybe someday there will be an opportunity for Google to play some role in distributing and selling phones, and getting carriers to compete with each other over customers for voice and data plans, as we originally outlined last December. But it’s now obvious that today is not that day.
And if Google wants Android to continue to be the carriers’ smartphone platform of choice — especially as Apple expands its distribution and eventually sells the iPhone at more carriers than just AT&T — Google had better start acting as a partner, and not as a competitor. Killing off the Nexus One is the first step.
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