When Google introduced the Nexus One in January through its online store, it was hoping to revolutionize the way U.S. customers purchased phones. Unfortunately, it hasn’t quite worked out and Google has admitted its failure and is taking a more traditional approach to selling phones.
The vision was always great: you buy the handset you want from Google’s online store without a carrier being involved and you can take it to whichever network suits you. You’ll have to pay a lot for the device itself but there will be subsidized options if you want to sign a long-term contract. All four major carriers eventually jumped on board with the Nexus One but Verizon (which was prominently featured in the launch event) backed out in favor or its branded Droid Incredible and Sprint preferred its own EVO 4G.
Google seems to have gotten the hint.
While the global adoption of the Android platform has exceeded our expectations, the web store has not. It’s remained a niche channel for early adopters, but it’s clear that many customers like a hands-on experience before buying a phone, and they also want a wide range of service plans to chose from.
The company plans to start putting the N1 and its future devices in stores so consumers can actually touch the thing before buying it. It will also stop selling the handset directly from the website, which will instead be used to showcase the latest and greatest Android phones.
This is a smart strategic move after the blunder that was the web store. Sure, the vision of a carrier-agnostic, unbranded smartphone store for all is great but, like many things that come out of Google that aren’t related to search, it didn’t work in the real world. It’s not all its fault, as the four major U.S. carriers use different technologies and frequencies and this makes unlocked devices only appealing to the most hardcore phone fans. When you factor in Google’s “equipment recovery fee” on top of the early-termination fee from a carrier, the search giant just became an expensive middleman.
The company could have done a lot of things differently and I would have loved to see it throw some of its billions behind subsidizing the devices to a reasonable level (Joe Callsalot isn’t going to pay $500 for a phone, no matter how cool it is). But the real lesson in all this is that even if you’re flush with cash, you cannot go around the carriers if you want to be successful in the U.S. market.
[Via Google blog]