Google’s Schmidt Says No To Nexus Two Phone

Eric Schmidt, the GEO of Google has confirmed that the search engine giant is not working on a successor to its Nexus One smartphone… because (he says) the first one was so successful.

Speaking to the Daily Telegraph, Schmidt said that Google had initially felt the need to build a handset in order to assist Android, so it worked with HTC to create the Nexus One handset. Google clearly wants Android to compete against the iPhone, and Apple has responded by suing HTC.

Sales Success?

“The idea a year and a half ago was to do the Nexus One to try to move the phone platform hardware business forward,” said Schmidt. “It clearly did. It was so successful, we didn’t have to do a second one,” he told the newspaper.

“We would view that as positive but people criticised us heavily for that. I called up the board and said: ‘Ok, it worked. Congratulations – we’re stopping’. We like that flexibility, we think that flexibility is characteristic of nimbleness at our scale,” he said.

Yet there seems to be a mixed picture as to how well the Nexus One has sold. In March Google’s CFO Patrick Pichette said that the Nexus One was profitable. But in the same month mobile analytics firm Flurry said that Google had sold only 135,000 units of the Nexus One through its first 74 days on the market. This was in comparison to more than 1 million units of its first generation iPhone that Apple sold during the same time.

Despite this, the Nexus One did gather good reviews upon its launch in January, but it also attracted some criticism as well. The first point of contention was Google’s initial decision in the US to only make the handset available from its webstore, a decision that Google has since reversed.

In the UK Google opted for the traditional approach to the market by using mobile operators.

And another issue raised in the US concerned the device’s apparent difficulty in picking up a 3G signal. Google responded in February to user complaints and said it was adding a multitouch mechanism and a software fix to improve 3G connectivity.

Schmidt also took the opportunity to take a little dig at Apple (though not about signal strength).

Closed Apple

“We don’t have a plan to beat Apple, that’s not how we operate,” Schmidt told the Telegraph. “We’re trying to do something different than Apple and the good news is that Apple is making that very easy.”

“The difference between the Apple model and the Google model is easy to understand – they’re completely different. The Google model is completely open. You can basically take the software – it’s free – you can modify whatever you want, you can add any kind of app, you can build any kind of business model on top of it and you can add any kind of hardware. The Apple model is the inverse,” he said.

Schmidt also took the opportunity to address the privacy concerns after Google’s infamous WiSpy incident. Schmidt said gathering data allowed it to deliver better-targeted ads to the end user.

“I think the criticism is fine. I think criticism informs us, it makes us better. It doesn’t bother me at all,” Schmidt said. “Those concerns are real – I’m not trying to move away from them. The fact of the matter is that if you’re online all the time, computers are generating a lot of information about you. This is not a Google decision, this is a societal decision. In Britain, you all allow yourselves to be photographed on every street corner. Where are the riots?”

Schmidt felt that Google is being kept in check by its customers and by the competition

“All of our testing indicates that the vast majority of people are perfectly happy with our policy. And this message is the message that nobody wants to hear so let me say it again: the reality is we make decisions based on what the average user tells us and we do check,” he said. “And the reason that you should trust us is that if we were to violate that trust people would move immediately to someone else. We’re very non-sticky so we have a very high interest in maintaining the trust of those users.”