Chocolate Factory eats crow on Googlephone

Ashesh Shah
April 28, 2010
173 Views
3 Comments

When Google uncloaked the Nexus One and started selling the self-styled “superphone” through its own online store, the company insisted it wasn’t competing with Verizon Wireless, Motorola, and all those other those partners selling all those other Android phones. But it appears that these Android partners have since convinced Google that such talk was indeed nonsense.

On Monday, Google not only said it will sell the Nexus One through partner retail shops in Europe, it also indicated it no longer intends to launch a version of the phone for Verizon’s American wireless network.

The day the Nexus One arrived, the scuttlebutt was that Verizon – like Motorola – was less than pleased with Google’s decision to sell its own handset, and now, we can only assume that Verizon and Vodafone, Verizon’s part owner, have forced the web giant to eat some crow.

This may have something do with the fact that the Nexus One isn’t what you’d call a top seller. Estimates indicate Google has unloaded a mere 500,000 devices since the launch on January 5. But on launch day, Google said it would be “would be happy to sell about 150,000” devices.

The idea, the company said at the time, was to create a “revolutionary” new channel that would make it easier for the world to buy smartphones – regardless of how many devices it sold in the short term. But less than four months later, the company is reading from a very different script.

“Our partners have played an amazing role in making Android successful, and the Android ecosystem has grown faster than our most optimistic expectations of even just a few months ago,” the company tells us. “By working with Vodafone and other operators in Europe, we’ll be able to get more Nexus One phones to more people more quickly.”

In January, Google wasn’t concerned about the health of the Android “ecosystem.” At least, it didn’t claim to be. It painted its online store as something that would operate alongside existing channels, not just in the short term but for many handsets to come. “Nexus One belongs in a class of device, which we call, superphones,” vice president of product management Mario Queiroz said that January morning.

“It’s the first device, the first phone, which we will bring to market with our operator and hardware partners from a series of devices…You might be asking how are we going to bring this product to market. Well, today, we’re also pleased to announce a new way for consumers to purchase a mobile phone through a Google-hosted webstore.”

Android project lead Andy Rubin said that existing partners like Verizon were willing to join this webstore for certain “efficiencies.” Google’s direct model would cut out all sorts of overhead wireless operators are just dying to cutout. “[Operators] just want to sell service plans,” he said. “This [web store] enables them to reach consumers very efficiently.”

Well, now even Google is awful close to acknowledging that this was just talk. “We have decided that the best and fastest way to get Nexus One into the hands of European consumers is through our partners,” the company said today. Note the word “best.”

And this admission is born out by that fact that in addition to offering the Nexus One through Vodafone shops and other retail stores in Europe, the company is not selling to the Continent through its webstore – and it has apparently reversed plans to offer a CDMA-based Nexus One on Verizon, the largest US carrier in the US, with roughly 90 million subscribers.

Under pressure

At launch, Google said that both Verizon and Vodafone would offer service plans in tandem with the Nexus One from its webstore. And it gave each a placeholder in the store indicating their phones would arrive this spring. But the Vodafone name has vanished from the store, and Verizon users are now pointed to the carrier’s website, where they can pre-order the upcoming Droid Incredible, another HTC-manufactured Android phone.

Google is still selling an unlocked phone to customers in the UK, Singapore, and Hong Kong as well as the US – as it has done since the Nexus One debuted. But the company has not expanded the store to other countries as it indicated it would. “Consumers in Europe will be able to buy Nexus one from mobile operators, beginning with Vodafone. We don’t have anything further to announce about Google’s web store at this time,” the company told us on Monday.

You might argue that Google has simply realized it’s rubbish at selling phones. For all Rubin’s talk of efficiencies, Google simply isn’t equipped to sell phones. Even if large numbers of people are inclined to buy a phone straight from an online search engine without the traditional marketing and hand-holding traditionally provided by the carriers – and we’re not sure they are – Mountain View is woefully unprepared to deal with support after the phone is sold.

But again, in January, Google said this was a long term endeavor. We would argue the company has backpedalled under pressure from its partners, whom the company very much relies on to sell Android phones through existing channels.

When we asked Google whether it had indeed nixed plans to offer the Nexus One on Verizon, it didn’t respond. But the company tells CNET that it “won’t be selling a Nexus One with Verizon” – an unusually unequivocal statement from the Mountain View Chocolate Factory. This couldn’t be further from what it – and Motorola – were saying on January 5.

“I see [Google’s Nexus One store] as another way to get to consumers, another way for them to buy devices,” said Motorola co-chief exec Sanjay Jha, who was trotted out during Google’s Nexus One press conference alongside Rubin and Queiroz.

Motorola and Verizon had just spent a reported $100 million promoting the new Android-based Droid phone. “I don’t see this as a threat [to Motorola]. I just see it as potentially an expansion of the marketplace.”

If it was just an expansion of the marketplace, Google would still be prepping a Verizon Nexus One.

It was Andy Rubin who, in the run-up to the introduction of the Nexus One, deflected questions about the phone’s existence by saying that Google would never build its own hardware or “compete with its customers” – meaning the likes of Motorala and Verizon.

Resource:
http://www.theregister.co.uk/2010/04/27/google_backtracks_on_nexus_one/

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