updated 01:20 pm EDT, Fri May 14, 2010
Google admits Nexus One not thriving online-only
Google today signaled a major change in its attitude toward smartphones by dropping its online store for the Nexus One. The company is still keeping its Android flagship but plans to move it to retail stores through carriers and partners, much like it did with Vodafone in April. Online sales will stop once enough Nexus Ones exist in retail, and the site will eventually switch to a showcase for multiple Android phones.
The search firm was happy with the phone itself and claimed that it had spawned "innovation" in subsequent handsets like the Droid Incredible and Evo 4G. However, it admitted that the online store wasn't doing well and that most still preferred the retail environment.
"It's remained a niche channel for early adopters, but it's clear that many customers like a hands-on experience before buying a phone," Engineering VP and Android head Andy Rubin said. "And they also want a wide range of service plans to chose from."
The Nexus One was never a strong seller as the sales philosophy and pricing limited its exposure compared to both other Android phones and important rivals like the iPhone. Without the ability to test the phone first-hand and no presence beyond a site that few customers actually knew existed, the Nexus One was limited compared to handsets that had footprints in thousands of retail shops and often had much more widespread marketing. All but T-Mobile and Vodafone customers have also had to pay the full $530 price for an unlocked Nexus One.
Apple's success with the iPhone is partly credited to its experience in retail. It not only has a large retail presence across its own stores, carriers and some third-party retailers, but it has often gone to significant lengths to ensure that there are working demo units and to skip as much of the usual activation process as possible when buying the phone in question.