Why Google Pulled Their New Nexus One Cell Phone Off The Market
Google first stuck their toes in the water in the cell phone business with Android on T-Mobile
. They were moderately successful and hoped by involving more handset makers and networks they would be more successful. So several months ago they jumped in and made a big splash. Then they introduced their own phone called the Nexus One. What has happened since is very interesting with an important lesson for both the company and for us.
They upgraded Android and put the new version on multiple handsets from various manufacturers like Motorola and HTC. They started working with multiple networks. They even worked with Verizon to brand their own version and called it Droid. Things were getting exciting. A little confusing, but we could handle that.
Everyone who worked with Google loved what was happening, until Nexus One. They pulled a fast one and introduced their own handset. At the time I said that might be the straw that breaks the camels back.
I said this device might be the best thing since sliced bread, but it may fail for a few very simple reasons. After only a few months on the market Google just announced they are taking it off the market.
Why was I so sure this would not work?
We all remember how Google broke the rules in Internet search and won. At the time the Internet was new, and changing, and they offered the same thing that Yahoo and MSN offered, but faster and better. Customers were waiting for newer and faster versions.
Since then they have expanded beyond that traditional search engine on the Internet. They have been successful at all of their efforts, on the net. They are number one on the net.
Now Google wants to jump into another industry and transform it. They want to own wireless going forward the same way. The problem is they are not having the same success.
One reason is the cell phone business is not new. It has been around for over 25 years. It has changed and matured in the market along with a couple hundred million customers. We are all partners in this adventure.
The online world was brand new and changing quickly when they jumped in. Customers did not have a strong idea of what the industry was, as it was quickly changing. That was a good marketplace for the change they brought.
However the cell phone business is long past that point.
It is already solid in the mind of the customer. Apple was successful with the iPhone because the smart phone market was already in place and had grown to around 15%.
People understood smart phones. A segment of the marketplace could appreciate the changes Apple brought to that segment.
Then Google jumps in. They are actually very successful with Android so far. That's because these devices are sold the traditional way, in stores, so customers who are shopping for smart phones can see and touch and try and compare. There is plenty of room for Apple and Google and other competitors in that space.
The Nexus One is none of that. When it was introduced it sounded big, but quickly we started seeing nervous Android partners who were now also competitors.
Who knows, it could be the best device on the market, but it won't sell because it is only sold on the web. There are plenty of early adopters there, but that's not how people buy cell phones generally speaking. They have to visit a store and touch the actual device and compare it.
That's how they buy. They want to compare it to what they already own, to other new devices. They want to try pressing the keys and see how easy it is to switch programs.
Google forgot, or maybe didn't understand that cell phones are not all created equal.
Recommendation. If Google wants to change the industry, or a slice of it, they should get into the wireless industry with their popular Android. Then after they build their brand in the space the can begin to transform it for their own customers.
Currently Android is selling faster than the iPhone. How long is the question. When the iPhone was new it sold faster too. At some point sales levels might be the same.
Is Nexus One gone forever? I think Google pulled it off the market now and may indeed reintroduce it down the road when their brand is further developed in the mobile industry.
The company has a good attitude. They thought they would come charging in and transform the wireless industry.
When they didn't we learned two important things.
- One, they won't be successful at everything they touch, at least not at first try, and
- Two they pulled this off the market quickly.
That is the sign of a company and group of executives who may be in tuned enough to actually make it in these new businesses.
This reminds me of MCI in the 1990's. They too had so many ideas bubbling around. They brought them all to market. Some were successful and others were not. Successes stayed and failures were pulled quickly. No one was scalded. The attitude was right on. Looks like what we just witnessed with Google.
It will be interesting to watch their next steps. One more thing. Perhaps when they do bring this back to life, the will give it a name that sounds like a cell phone instead of hair conditioner. Just a thought.
by: Jeff Kagan
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