Google Stops Selling Nexus One Online

Google will stop selling its Nexus One Android smartphone through its web store worldwide, leaving it up to mobile phone operators and other partners to sell it through the normal channels.

Google started selling its Nexus One in January, unlocked for $529 (£368) or for $179 (£124) on a two-year contract with T-Mobile in the US. The phone is still there in Google’s webstore, but will disappear “once we have increased the availability of Nexus One devices in stores” according to a blog post by Android creator Andy Rubin.

OK carriers, you win

Google will work to make the HTC-built Nexus One, which runs the Android 2.1 operating system, available through wireless carriers’ retail channels, including online, in stores and over the phone, in the United States and other countries. When the device finds sufficient success in retail stores, Google will turn its Webstore into a showcase for Android phones.

“While the global adoption of the Android platform has exceeded our expectations, the Webstore has not,” Rubin said. “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 move is a sign of a failed experiment by a company intent on disrupting the wireless operator market, according to commentary. It is also the ultimate sign that consumers are not ready to purchase phones without laying hands on them.

After Google launched the phone on its own site along with the T-Mobile deal, Verizon Wireless and Vodafone were expected to swiftly offer the device, which has recevied good reviews, with its 1 GHz Qualcomm Snapdragon processor and multitouch access to rival Apple’s hallowed iPhone. Sprint promised to sell the device in March.

Vodafone began selling the Nexus One April 30 in its UK stores, online and over the phone, but in the US Verizon and then Sprint backed out in the two weeks that followed.

Google directed consumers to buy the HTC Incredible from Verizon, while Sprint said it would focus on offering the HTC Evo 4G phone. Both the Incredible and Evo 4G run Android 2.1.

Offering the device solely through its Webstore was a move on Google’s part to disrupt the traditional model in which carriers sell mobile phones through their stores and retailers such as Best Buy. Google tried to cut the middleman out, but consumers proved reluctant to buy the phone sight unseen.

Google Chief Financial Officer Patrick Pichette said April 15 the Nexus One was profitable, but analysts believe the device sold in the neighborhood of 250,000 to 300,000 units, nowhere near the more than 1 million units Verizon shipped of the high-end Motorola Droid smartphone (called Milestone in the UK).

Unlike Verizon’s $100 million marketing campaign to push the Droid, Google didn’t market the Nexus One, another failure. Banishing the Nexus One from its Webstore reflects the biggest failure of all.

While some analysts said the Webstore was not a failure, Forrester Research analyst Charles Golvin never cottoned to the idea, telling eWEEK, “I think [Google] had two purposes—to begin to alter the retail model for phones, and to provide an exemplar of what Android could do. I don’t think US consumers are ready for the retail change (though things are indeed changing with the expanding prepaid market), and other devices like the Incredible are eclipsing what the Nexus One can do.”

Google’s Rubin put this positive spin on the experience in his post:

“Innovation requires constant iteration. We believe that the changes we’re announcing today will help get more phones to more people quicker, which is good for the entire Android ecosystem: users, partners and also Google.”