The Nexus One is a Failure (Fat Chance!)

Did you see? Didja? Google’s uber-phone, the Nexus One, is a big honking failure! Really, it is! We haz the numbers to prove it!

Well. Not so fast there, pardner. I don’t think you understand what Google wanted out of this deal.

If you start out from the assumption that Google is looking to a) make money from the Nexus One in isolation; b) capture lots of market share with the Nexus One; you are sadly misreading the situation. Remember, Google isn’t trying to become a mobile phone company — they want the world to become so well-connected, so digitally accessible, that they can leverage that interactive connectivity to the nth degree.

The Numbers

After 74 days on the market, Flurry estimates that Google has sold 135,000 Nexus Ones. … In its first 74 days on the market, the Droid sold 1.05 million units. In the iPhone’s first 74 days on the market, it sold 1 million units.

135k Units? Even on T-Mobile only, even with online only sales, that’s an ouch right? Well … in a word, nope.

If Google was Palm, or even Rim, whose future depend on selling cell phones, numbers like this would be a disaster. But Google is only tangentially interested in making money as a phone provider.

They really want to see Android succeed however. Really, really, really. Because an open, small-platform OS as powerful as Android establishes a high technological bar for these devices; it ensures an open development platform and a capable web environment guaranteed a high level of support from the best known online brand (er, Google). What does that get Google?

More Eyeballs Baby!
That gets Google a vastly larger set of people it can sell ads to. I took flak last time I visited this issue because I said Google’s core business is search; lots of folks commented that Google’s core business is advertising, not search. That is true in theory, but in practice the only really profitable way they sell ads is via search. So you can interpret that statement also as: ‘That gets Google a vastly larger set of people it can deliver search results to’ as well. Either way, more people means more revenue for Google.

So we’ve established that Google doesn’t care about making the big bucks selling a phone; why build it and sell it themselves? Easy, it gets them a controlled platform to innovate on. Gives them a lever to make sure the big-time manufacturers don’t stagnate. Complicates Apple’s strategy of suing out of pique. Appeals to the random geek crowd. Teaches Google about consumer electronics, retail style, something they can use as they push Android into tablets, cars, set-top boxes, etc. Lots of residual benefits.

Those numbers again…
In that light, let’s rephrase those numbers:

In their first 74 days on the market, Flurry estimates that Google has sold 1.14 million Nexus Ones and Droids combined. In the iPhone’s first 74 days on the market, it sold 1 million units.

That number makes Google smile, and doesn’t count the various other Android devices out there. Android’s growth is pretty impressive, for all the odd fits and starts it has had. Android is pretty attractive to use; I’ve had both a 3G and 3GS iPhone, and after handling a G1 for a day and a Droid for a couple hours, it will be a pretty easy switch when my contract is up. Boy, will I miss Glyder and Glyder 2 however. At least I know there is already a MLB At Bat app for Android.

(Also? I miss Verizon’s network. Plus? I am a Java developer by trade, under Linux primarily, so if I am going to play with Android I don’t need to spend any more money to set up a development environment. And if I build something for the Android, I won’t get crapped on by Apple’s Kafka-esque App Store.)

No, I think the execs at Google are plenty happy with Android’s uptake, and satisfied with what they are learning from the Nexus One. The Nexus One is a non-traditional solution to a set of non-traditional problems by a non-traditional company. As such, it’s sales number can’t be interpreted the way, oh, Palm’s sales figures can.

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10 Comments on “The Nexus One is a Failure (Fat Chance!)”

  1. The flopping number of nexus one sale is minuscule to the adoption rate of Android in the market place. I really look forward when Palm decide to move to Android. This will take Android to the centre stage in the mobile OS market place.

    • designbygravity Says:

      I don’t know about Palm, but you are right about the overall Android market. It seems to me that Google expected this out of the Nexus One.

  2. spelling Says:

    I think you mean “flak”.

  3. Great article and it really puts to light some of the facts that other mainstream news companies haven’t taken note of.

    Google doesn’t need to sell a ton of phones, they just need to spur Android adoption.

  4. Lewis Oaten Says:

    What an excellent article! Really sums up what I keep trying to explain to people. My nexus one is a platform for innovation to drive Android, not monopolise it.

  5. Good point! I was wondering what happened with it.

  6. […] The Nexus One is a Failure (Fat Chance!) Did you see? Didja? Google’s uber-phone, the Nexus One, is a big honking failure! Really, it is! We haz the […] […]

  7. Hey there! Just wanted to say that this is one well written article! Thanks for posting this. I was looking for a site that has this kind of info and I’m glad I stumbled upon this one. Gotta love the affiliate marketing business 😀 Keep up the great articles.

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