How Google Goofed in Porting the Nexus One to AT&T

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News Posted: Wed, Mar 17 2010 11:15 AM
Some blunders are entirely understandable, like forgetting to put your pants on before walking out in public (we've all been there, right? Right?). Others have you scratching your head wondering 'what the frack were they thinking?' Google's latest move falls into the latter category, but we're getting ahead of ourselves.



In a blog post this week, Google announced that its Nexus One smartphone "superphone" is now compatible with AT&T's 3G network, something that hasn't been possible up to this point since T-Mobile and AT&T use different 3G frequencies. So how'd Google do it? No deals with the devil here, the search giant simply released a second model that's compatible with both AT&T's 3G network and will run on Rogers Wireless in Canada.


Brown and black areas represent 3G. Pink represents EDGE/GPRS.

On the surface, this is a brilliant move by Google. After all, the Nexus One hasn't exactly been smoking the competition in sales, let alone living up to the hype as a potential iPhone killer. And how could it, given T-Mobile's dismal 3G coverage? It can't, and the proof is in the sales. According to Flurry, a mobile analytics firm, Google sold about 135,000 Nexus One smartphones in the past 74 days. By comparison, Apple sold eight times as many iPhones during the same period, and even Motorola's Droid outpaced the Nexus One by the same margin.

"As Google and Apple continue to battle for the mobile marketplace, 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," writes Peter Farago, VP of Marketing, Flurry.



Farago goes on to argue that Apple is enjoying much more 3rd party developer support, and that ultimately "developers support hardware with the largest installed base first." If that's the case, getting back to our original question, why then are we scratching our heads over Google's latest announcement? Because we can't fathom how the Nexus One will turn it's lackluster sales figures around at $529 a pop. Without a subsidized two-year contract -- and there isn't one being offered through AT&T, unlike T-Mobile, which offers the Nexus One for $179 -- Google's fighting an even bigger uphill battle than it needs to. Even more perplexing, Google appears to be just fine with that.


Image Credit: Flurry.com

"We're pleased with our sales volumes and with how well the Nexus One has been received by our customers," a Google spokesperson told InformationWeek.com. "The Nexus One is one of a fast growing number of Android handsets which have been brought to market through the Android ecosystem. Our partners are shipping more than 60,000 Android handsets each day compared with 30,000 just three months ago."

That's fine for the Android platform, but if Google is serious about pushing its own hardware out along with it -- and they should be, considering the Nexus One is really nice smartphone -- they're going to need a different game plan.
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rapid1 replied on Wed, Mar 17 2010 12:31 PM

Ok Paul the only time I've done the no pant's thing in public has been in a dream. Either way Google really messed up on the Nexus one, but Android in general is out performing iPhone for now. That is until they release the next version. The Nexus one and it's release was not good, as have been a couple other marketing decisions lately.

Google has basically been a market darling on everything until these things have happened. I am not saying in any way that they have become unsuccessful in there technology march. As far as it goes they are still a baby compared to the other players in the market. Therefore there next steps are going to be important I think.

I think it will be interesting to watch how they fix these things, and what they bring to the market in the next couple of years. As far as it goes everything up until these few recent things has expanded the markets and there impact.

The true measure of a company is how they recover from a mess up though.

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rapid1 replied on Wed, Mar 17 2010 12:37 PM

Another point and one totally unrelated. On that coverage map my city (Atlanta) is the largest in the US with very fast mobile web. That's interesting to me or anyone who lives around here, but there is no name on the map for Atlanta. I just recognize the map point (Below and to the right of Memphis) because I live here.

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Did I read $529 correctly? I can't understand the need to charge such ridiculously high prices. I'd love to get an HTC, but not with a price tag like that one and can't say that I would want T-mobile again, with it's every other call gets dropped rate. The other issue with their sales is that their too late in the game to hold promise, or be much of a competitor since everyone else just got their new phones.

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LockeCPM5 replied on Wed, Mar 17 2010 1:34 PM

I really think it would be in Google's best interest to work through the carriers and subsidize the Nexus One. Google has truly made a remarkable handset, one that set the bar higher and should be used as the new benchmark for all smartphones going forward. three years ago, paying such high premiums for a smartphone was thought of as acceptable. But in today's world, especially during the economic downturn we are now in, high unsubsidized prices are almost considered unacceptable. Look at the Droid, the most successful selling Android OS device to date, and even the iPhone. Both have subsidies and both sell like hotcakes. Google has a gem with the Nexus One, and to be on top they should approach the carriers to subsidize the handset so they can get this technological marvel into as many hands as possible.

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You read that right, the Nexus One runs $529 without service, including the one that's compatible with AT&T's 3G network.

Equally frustrating is for T-Mobile subscribers on a Family plan (such as myself) don't quality for the $179 upgrade pricing - that's only good for new members and/or those on an 'Even More Individual 500' plan. I can only conclude that Google hates families.

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Kasel23 replied on Wed, Mar 17 2010 4:50 PM

Nexus One pricing was one of those recent Google decisions that made me go "huh?". I'm disappointed in the way they executed the phone sales and services for it. It's a great piece of hardware, but shouldn't be touting a $500+ pricetag.

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RA1D replied on Thu, Mar 18 2010 3:38 AM

i also tried to grab the Nexus One but got denied since I was already on a T-Mobile family plan. i don't get it...

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digitaldd replied on Thu, Mar 18 2010 8:49 AM

Most phone's purchased without a contract are expensive but the extra money is worth it if your monthly bill would normally increase a lot with a new contract. I have a friend who has T-mobile with a grandfathered unlimited data plan which costs $5.99 a month, his total bill is like $48 a month with $15 in taxes included for unlimited data, 200 texts, and 600 minutes a month. If he re-did the contract  it would cost him $30 for 600 minutes, $30 for unlimited data, and $6 for 300 texts a month + $15 in taxes or $81 a month or if he goes with T-mobile's unlimited everything plan $50 + $15 in taxes and surcharges, which is $17 more a month than he currently pays.

 

Personally I'd rather pay more outright for the phone than getting a discount on the hardware but a higher monthly bill.

 

I think soon that will all go away as our Cellular companies eventually just charge us something like $10-20 a month for the duration of the 2 year contract in order to get the new phone.

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mhenriday replied on Thu, Mar 18 2010 9:26 AM

I can only applaud the efforts of Google toward separating hardware purchasing from subscription to a telephone carrier. If a carrier wishes to use this phone to lock someone in to a long-term contract, it can always do so by providing a locked, subsidised version, but by making an unlocked version of the telephone available to the general public, Google has gone a long way toward rendering murky industry practices a bit more transparent, to the benefit of consumers....

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realneil replied on Thu, Mar 18 2010 12:12 PM

"Google has gone a long way toward rendering murky industry practices a bit more transparent, to the benefit of consumers...."

Separating hardware purchasing from subscription to a telephone carrier is one thing, and a good thing too. But the price we have to pay for the separation is a little frightening at best. I just don't see that it costs that much to make this phone. So I will hesitate getting one until I see it as a good value. Remember that Google stands to make allot of money off of this phone by virtue of delivered advertising over the viable life of the phone. It's their main income stream and you having the phone opens you up to receiving more advertising experiences daily. That could be worth far more than the income from the obviously inflated price of the phone and the 2 year contract term.

My Motorola Razor Phone is well into it's fourth year now.

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I Am Still waiting for the all inclusive phone, that will be free with a two year contract and only cost me 50dollars per month? :)

Hopefully it will also be a universal remote for the HT, and have an infinicel battery so we don't have to charge it! For now I still use my phone just for a phone. I guess I have just grown tired of constantly having to upgrade something outdated that was the newest and most advanced just two months ago?

I agree with Realniel, My cellphone is around 3yrs old and since I just make calls and texts, it works just fine.

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