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Google’s Nexus One Android Phone – Success or Failure?

Google's Nexus One phone was an interesting marketing experiment ...Unfortunately, sales never reached high enough targets and this week Google announced that it has ended production of the phone...The questions of why the phone failed and even whether the phone failed are even more interesting, though. We'll never know for sure, but here are some thoughts...

Google’s Nexus One phone was an interesting marketing experiment – introduce a new, self-branded phone that Google sold directly, not through the wireless carriers. Unfortunately, sales never reached high enough targets and this week Google announced that it has ended production of the phone (through its manufacturing partner, HTC) and is closing its web store.

The questions of why the phone failed and even whether the phone failed are even more interesting, though. We’ll never know for sure, but here are some thoughts.

First, assuming the phone did fail (which we’ll come back to later), one possible reason is that Google did not pay enough attention to its four marketing Ps – product, price, promotion, and place (distribution). Let’s assume that the phone itself was good, so that leaves the other Ps.

First let’s look at the distribution channel (place). Cell phones – more than most other products – are inextricably entwined with their service provider, so attempting to bypass the service provider was already a daunting gamble by Google. Even Apple, which garnered enough interest in its phone independent of the network, still chose a service provider with whom to partner.

The cell phone distribution channel is especially important because of the marketing effort that the service providers put into their phones. First, there’s the next P, price. As everyone knows, you can always get phones for less than the retail price when you buy from the wireless carrier (as long as you accept the two-year commitment). So why buy outside of the wireless carrier? We’ve all been conditioned to think that way.

And finally, let’s consider the last P, promotion. Google didn’t just introduce a branded phone. More importantly, it also introduced a phone operating system (Android) that it hoped to induce others to use in their phones. One of those manufacturers who immediately decided to do so was Motorola. They, in conjunction with Verizon (as opposed to Google’s approach of going it alone), launched a huge advertising campaign for the new Droid phone (“Droid Does”) at the same time that Google started selling its Nexus One. With Verizon’s massive marketing push, everyone knew about Droid, everyone got a good price for Droid, and everyone associated the name, “Droid”, with “Android”. Where did that leave Nexus One? Apparently nowhere.

However, all of the above was based on the assumption that Google did fail with the Nexus One. What if, though, the primary purpose of the Nexus One was to generate enough buzz about the Android operating system to propel all Android-based phones (i.e., Google-based phones) to mainstream success? Once the buzz did its work, the Nexus could happily be retired. In that sense, maybe the Nexus One was an outstanding success. Android-based phones are quickly challening the iPhone for smartphone market share. Google never was in the physical product business anyway.

Domus, Inc. is a marketing communications agency specializing in integrating the digital and social media worlds with classic marketing principles to deliver high returns on investment for our clients. For more information, please visit us at http://www.domusinc.com.

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