What hasn't really come up is the fact that most flagship smartphones today are launched by the carrier, which ponies up millions of dollars on nationwide ad campaigns to convince people to switch for this hot new device (or to upgrade and re-up their contract). T-Mobile not only doesn't market the Nexus One or sell it in their stores, you won't even find the device anywhere on their site.
Is the supposed 135k devices sold even anywhere near the number of units, say, Apple sold in that same amount of time? No, definitely not. But considering the lack of physical retail presence, no mass marketing, and the fact that Google (for whatever reason) seems to privilege the unlocked, $530 version over the $180 subsidized device, I'd say over a hundred thousand units in a couple of months would make it surprisingly successful, considering the circumstances.
Update: I also forgot to mention that the first Nexus One (on which the 135k number was based) only works on T-Mobile's 3G network. In other words, that 135k number is for one phone on one carrier in the US.
I totally agree Ryan, besides, Google said they expected to sell about 150k of these. It was the analyst who thought they would sell 3.5 million in 2010 alone. Google is trying to change how Americans buy their cellphones and their service, not move units and rival their hardware counterparts.
Yeah, it's the unlocked price. Doing that challenged the accepted model of subsidizing. Adjusting for that, it's sold very well. People want to pay less now, even if they pay more later. We're dumb like that.
But how, really, are consumers dumb? Only on T-Mobile do you save on monthly rates if you bring your own (e.g. unsubsidized) phone. On the other carriers, the price is the same.
Moreover, if you live in the United States and rarely travel overseas, which is true probably for most Americans, the fact that it's unlocked is largely irrelevant. The T-Mobile version doesn't get 3G on AT&T. Likewise, the AT&T version doesn't get 3G on T-Mobile. I don't know about Sprint & Verizon -- they are both CDMA, but I don't know if that means that a phone purchased for use on Sprint will work on Verizon or vice versa. And the fact remains that even if you get a Nexus One for use on Sprint, you won't be able to use it on AT&T or T-Mobile even if it's unlocked, and you won't be able to use it in Europe or most of the rest of the world.
Of course, you won't have to pay an early termination fee if you cancel service before a contract is up. But guess what? The subsidized price plus the ETF is pretty close to the price of the unlocked phone -- and, as I said earlier, these unlocked phones aren't really transferrable between service providers anyway.
So I don't see the big benefit of purchasing unsubsidized phones. If all carriers had T-Mobile's or most European carriers' system of giving monthly rate discounts to customers with unsubsidized phones, or if we had multiple cell carriers which operated on the same frequencies and mobile telephone systems like in Europe, then there's a definite advantage. Until then, it's a chimerical advantage.
I really like that Google is trying to change the way consumers buy phones, but I agree that they've sold 125K devices in spite of making it awfully hard for the average joe/jane looking for his/her next smartphone. I make a point of trying out new smartphones as they hit the market, but it wasn't until 2 weeks ago that I finally got to hold a Nexus One. The phone is super impressive (fast, good weight, easy to use, etc.) but I could have easily gone another six months without getting to experience it for myself. It's asking a lot of a consumer to make a $500 purchase without ever getting to hold or use the device.
Sales aside, the N1 has had nothing but bad PR. You may think that there's no such thing as bad press, but Eric Tsang's crazy launch keynote and up to the "Nexus One doesn't go in pockets" story does not help it.
While there was no media blitz advertising the device, it did have an ad on one of the most highly visited websites in existence: google.com. And plenty of surveys show smartphone buyers know about the device, they just aren't buying it.
I think in general what has kept it at 125k so far is the close proximity to the Droid release. That device was indeed hyped like crazy all over the place, and most people wanting to jump into the Android platform got one. Now they are in a 2 year contract, and not willing to break it this early to get a device that is only slightly better.
It's not a flop, but it wasn't under marketed either.
I completely agree. Lets revisit this question in 3 months after ATT in the US and Rogers in Canada have had a chance to sell and have the phone on real networks (not to knock T-Mobile) in those respective countries. Adding to the Nexus' uphill climb thus-far as been the price point it was at and the relative non-existence of their availability at mainstream marketers (in the US), making the experience of buying one hard to do. Apple's success with the iPhone really took off with the 3GS because users could go into any Walmart, BestBuy, or Apple store and use one. The jury is still out on Google as a handset company but lets not jump to conclusions.
I have to agree. While using the phone with extremely heavy usage at #sxswi I have to say Google has nailed it. The device has performed way beyond expectations. Sales figures only show one side of the story. I think Google is easing their way into the market and with the phone available to more carriers it will start to increase it's market share.
So are we ignoring competitive sales and deeming this a pioneer in the "phone without the carrier" market? Do we wait for phone manufs to start selling their phones directly and then compare those sales to the Nexus One?
I do like how Google is handling the sales of the Nexus One. In a way only Google can. They are attempting to completely alter the already well established market of the subsidized cell phone. Currently the average consumer will have a lot of trouble rationalizing the purchase. They never get to play with the device, they don't have it presented to them through mass media hype and, in the case of the new AT&T version, they are going to have to get a SIM card separately and install it.
For those of us discussing this these aren't very serious issues, but for the average consumer they are huge. So of course the initial market penetration is not going to be great, luckily Google has the money to throw some weight behind its ideas of how the smart phone market should work. I would certainly have one if I had not purchased the Droid on its day of release (just couldn't help myself). Overall this is a great move by Google for consumers, I think this will eventually show with increased sales in the future as the market and consumers evolve. I know I will be buying unsubsidized from now on, and my next phone will be a Nexus One... or hopefully a Nexus Two.
Taking a step back further on this concept is that the American are used to buying phones through a phone provider & contract. I've always bought my phones unlocked (n95 and now nexus one). when people ask me about how i got my phone, it always takes me 5 minutes to explain not all phones are bought through a service provider and can work on any phone service that uses a sim card.
My only gripe is that as an owner of an "unlocked" T-Mobile N1, I cannot go to AT&T, get a SIM and pop it in. If I do, I only get EDGE, no 3G. So its not really true unlocked. Not sure why given both are GSM. Google should fix this and allow us to switch between carriers so we have some control. Especially in instances when the network type is the same.
Both networks have different 3G bands. Not a Google problem. Unless you want Google to go and adjust T-Mobile's towers to make them the same frequencies as AT&T's. And the phones are unlocked. If they weren't than you couldn't switch sim cards between different providers at all.
Google may not be running a marketing campaign that can compete with an iphone or Droid campaign, but they ARE buying AdWords ads on just about every conceivable term. They also had a ton of free press leading up to the launch, so it's not like people dont know about this phone.
I think the real lesson here is that people would rather take the $400 discount and be locked into a contract. If the nexus one were sold conventionally, I think these numbers would be much higher
Would I call the Nexus One a failure? Not at all. I would say it's successful in selling well to it's target audience, the geek community. The way Google is selling this phone will never reach to the mainstream or a broader market.
I agree, this is only the tip of the iceberg, once they get their the kinks worked out I could see them making a much larger presence with the possibility of in store sales. Hell what if you could just walk into walmart or any other store and just buy the phone and walk out with out any need to talk to a mobile sales associate. They are really the only ones that have the power to do that right now.
I think because then Google really risks alienating their hardware partners. Perhaps they are going to rotate through companies, so the Nexus Two (or whatever the next Google phone is) will be produced by Motorola? Even then, I feel like Google expanding their official offerings would make their hardware partners very nervous.
Not to mention I see they have a new slew of ads running on the site, I think it will only be a matter of time before this really starts to take off, especially by word of mouth when it comes out for Verizon.
I don't think the N1 is a flop however, The way google marketed it suck. If they were trying to appeal to the mainstream audience then they should have used more than ads with embedded with video. But instead the N1 was marketed it using some online grassroots movement. So is it a flop? Not if the phone was focused toward gearheads but it was a flop it was chasing after the average user. Because the general public does not know what a Nexus one is.
I think someone hit the nail on the head already, what is making this a flop is the over hype the phone got. People kept claiming this to be "THE GOOGLE PHONE" but a lot of tech sites quickly identified it was just the first phone running 2.1. I think once it hits AT&T and Verizon it will pick up more speed but I also feel like a lot of people who like HTC phones will go for the HTC Android phones running Sense.
Google probably thinks the Nexus is a flop. Come on, whether their marketing was designed for mass distribution or not, when they designed a nice looking $600 phone they probably wanted to sell millions of it. And they didn't.
Considering how much hype they've created with this phone (on Google, on Youtube, through handing out review units, etc), the sales result is definitely not good enough.
They can justify that their sales weren't good because they didn't sell them in stores, but that's only an excuse. It's a flop!
They probably could if they signed subsidy agreements with various telecoms. The fact that they didn't really makes me think this was more of an experiment than anything else. Dipping their toes into the water, seeing what happens if they open up their own online store and distribution channels.
One would think that selling 100K+ phones at a completely unsubsidized price would be a pretty successful undertaking. It will be interesting to see how they expand upon this strategy.
Whether the Nexus One was an experiment or not, it is still a flop in the eyes of many. The iPhone was sold at unsubsidized price with much greater results, compared to the Nexus One. Of course, iPhone had the Apple Stores, so it's a little different situation.
I wish Google put more effort into distributing the Nexus One. Android itself is still very new, and the Nexus One's flop did not help Android in any way. I feel like this has hurt Android's reputation in the big picture... Imagine that they had offered the Nexus One at discounted prices on every carrier. it would've sold millions. More Android users = More developers = More apps and support.
I think Nexus One was not an experiment, rather it was just Google being arrogant. They probably thought they could sell millions by just having a webstore for it. Well, they didn't, and now their excuse was that it was an experiment.
I'm not an Android hater. I own a Motorola Milestone, and I'm loving it right now.
Hopefully HTC Desire and HTC Incredible will sell like hotcakes and spread the Android love.
I see iPhones everywhere. There was no good consumer smart phone before it (Blackberry lovers please don't kill me). The iPhone has been out for a few years and has saturated the market. Android now has to over feed the smartphone market. An extremely uphill battle, getting iPhone users to jump ship. Yet android's market share is rapidly growing.
"We're pleased with our sales volumes and with how well the Nexus One has been received by our customers. The Nexus One is one of a fast growing number of Android handsets which have been brought to market through the open Android ecosystem. Our partners are shipping more than 60,000 Android handsets each day compared with 30,000 just three months ago."