Google sure seems pleased with its Nexus One “superphone,” as the search giant’s Chief Financial Officer Patrick Pichette said the handset is the “benchmark setter” in the mobile world.
During a Morgan Stanley conference Monday, Pichette said the Nexus One has raised the bar for the industry and showed consumers that there are legitimate alternatives to Apple’s iPhone juggernaut. After freely distributing the Android mobile platform to various handset makers for about a year, Google began selling the Nexus One directly through its online store in January. This can be seen as somewhat of a risky strategy because it could alienate Open Handset Alliance members like Motorola and HTC but Google must have felt it needed more hardware integration in order to control the Android experience. A few of the IntoMobile staffers have the sexy handset and they seem to love it, but it would be a stretch to say the Nexus One has been a blockbuster success.
Getting into a physical business isn’t as easy as getting into a digital one. Sales haven’t been that strong compared to devices like the iPhone and Droid, users have complained about 3G connections and the Federal Communications Commission publicly questioned why the search giant charges an equipment-recovery fee when U.S. customers are already subject to an early-termination fee from T-Mobile. Like most Google products, the phone selling business appeared to launch in beta form and it is slowly getting better. The company has implemented a customer assistance line, slashed its ERF and it could begin selling a Verizon version of the Nexus One as soon as March 23. The Verizon version could be quite popular because Big Red has more than 90 million users and a large 3G network.
I still have some misgivings about Google’s phone store because I believe the intent is better than the outcome for U.S. consumers. Because of the lack of true interoperability between networks, Google just becomes another pricey middleman between consumers, mobile service and the devices. Hopefully, Google’s open vision for its store will have a positive impact on how AT&T, Sprint, T-Mobile and Verizon do business.