Google’s brand new Android super-phone, the Nexus One, may not be selling as quickly as one would have hoped after the incredibly persistent marketing strategy by Google. Anecdotally-speaking, for 4 days after the phone was released all I saw on almost any site I visited were “Nexus One” ads being hosted up by Google AdSense; so Google isn’t skimping on advertising this puppy.
VentureBeat posted some marketing data that shows the Nexus One only sold 20k units in the first week compared to T-Mobile’s 60k myTouch 3G launch numbers (According to data from Flurry).
Going a step further and looking at the web-traffic analysis from a few hundred thousand websites tracked by the click-tracker, Clicky, the picture looks similar:
Looking at this data I had the gut reaction of “Yea, but the iPhone has been out a lot longer!” — which some of you might be thinking — but look back up at the Flurry data. The Week 1 sales for the iPhone 3GS (that’s right, the THIRD iPhone to come out) destroyed the Nexus One by a factor of 80x… that is just incredible.
Why Low Sales?
We could guess that a lot of that has to do with the un-subsidized price of $529 that Google is selling the phone for (assuming you are already in a contract with a provider) or the almost-useless and overly-expensive $80/month Individual plan that is bundled with T-Mobile for $180.
My guess is that Google had an arrangement with T-Mobile to make the unlocked price of the phone, for at least a few months, high enough so as to drive a good majority of folks into 2-year, rape-priced data plans with T-Mobile as a “Thank You” for T-Mobile working so closely with Google on their device launches thus far.
The other factors we see killing the excitement around the launch of the Nexus One is:
- No affordable family plan
- No affordable individual plan
I don’t know where T-Mobile came up with the $80/mo for an unlimited/individual plan, but I have an unlimited plan with them now with a myTouch 3G that costs me around $50/month as part of a family plan.
What’s the Real Motivation?
The only reason I can think of T-Mobile putting up such a big wall at launch to new users flooding in with lower-priced plans and more options is likely a requirement from the Google-side which has to keep future offerings for Verizon seems competitively appealing to shoppers so they agree to vet and activate the phone on their networks. Given Verizon’s chronically higher price for data plans, my guess is that T-Mobile wasn’t allowed to low-ball the whole operation with a $40/mo individual plan otherwise Verizon and other carriers would have said “Fuck that noise, we aren’t going that low. Have fun with your T-Mobile-ONLY phone Google” and walked off.
I would also further posit that Google doesn’t mind the slow start to the Nexus One sales as all they are doing now are:
- Stretching their legs with a new direct-product-sales strategy that has some growing pains.
- Getting more carriers on board and signing contracts to carry the Nexus One, Two and so on.
- Refining production relationships and processes with HTC and partner companies.
20k unit sales in the first week on T-Mobile isn’t great, but Google isn’t only going to T-Mobile, what happens in Week 1 on Verizon when the Nexus One has been reduced to $399 in Spring? What about in Week 1 a year from now when they release Nexus Two on T-Mobile, Sprint, Verizon and AT&T all simultaneously?
That’s what matters. They are just laying foundation right now.
I disagree, 20,0000 units in the first week is a failure considering the hype, then throw in the 3g issues, and the whacky touch screen issues popping up now,, trying charge existing upgradable Tmo customers on family plans 530 bux. Id say it was a fairly botched launch
Randal,
All those problems definitely came together to make the launch stickier than anyone likely wanted, but in Google’s overall cell-phone strategy the slow sales aren’t an indicator of failure in the long-term given what Google is trying to do.
To look at it another way, if the iPhone 1st Gen came out and sold 20k units in Week 1, that *would* be a product failure. And since that product was tied to AT&T and not going anywhere else and there were no other devices coming out with the iPhone OS on them, it would have been a failure end-to-end.
Android is different… Google wins as long as Android continues to penetrate, and what they are doing with these contracts with T-Mobile now, and then Verizon in March are expanding the field in which Android can play. They are also securing their position as the distributer of what I’m assuming will continue to be the “best of breed” Android devices going forward.
I doubt T-Mobile, Verizon, Sprint or AT&T will be selling the most-saught-after Android devices in the coming years, those cutting edge ones will likely all come from Google in this same unlocked-and-available-everywhere fashion that they are doing.
That all being said, I’m just as annoyed as you are about the 3G issues and the early-termination *rape* Google is leveraging against customers given that the goddamn devices costs $174 in hardware to make.
What happened to “Do no Evil”, sounds like somewhere along the way it got translated into “Corporate America is like a bottomless piggie bank!”
Any how many people were bombarded with ads for the Droid prior to launch? The N1 was leaked etc before, but is the average consumer following those?
I was all about getting this phone. i waited 2 years for it. Then it came out and had a bullsh*t service agreement from t-mobile. $500 for a phone, not for me. Lame, lame, lame. I love google but this was definitely a failure in my mind…
Noah, it is firmly my belief that Google *has* to offer slightly unattractive unlocked options so as not to blow the carriers out of the game and then they would retaliate by slipping their commitments to Android.
That being said, I have high hopes that the unlocked cost of the N1 may drop in March when it goes to Verizon’s network and then T-Mobile and Verizon can battle it out… maybe you could snag one then?
If you are a heavy data user and travel a lot, I would recommend you steer clear of T-Mobile. They are a decent company, but data coverage is really terrible outside of big cities.
Thanks for discussing. I haven’t in fact have time to be able to read it yet still I’ve bookmarked it so I can look over it afterwards.
Another article on the subject of poor sales right now not being a failure: http://discuss.gdgt.com/htc/google/nexus-one/general/Dear-everyone-calling-the-Nexus-One-a-flop-you-re-probably-wrong/