Google launched the Nexus One with much fanfare, and it was projected as a serious competitor to the iPhone. However, the hype has not translated into sales yet.
Now Goldman Sachs has reduced the sales estimates of the Nexus One from 3.5 million units to 1 million units in 2010. This is definitely bad news for Google who were trying to make a splash in the US market with the Nexus One.
We previously estimated that Google might sell 3.5 mn Nexus One units in 2010. Initial data-points were disappointing, possibly due to limited marketing and customer service challenges. Flurry estimated (based on mobile traffic) that Google sold 20,000 in the first week, and 80,000 in the first month, both annualizing to 1.0 mn. We forecast that Google sells 1.0 mn Nexus One units in FY2010, benefiting from US carriers other than T-Mobile, and non-US carriers such as Vodafone, promoting the device too, but suffering from limited marketing activity. We assume that Google rolls out a second Nexus handset, markets it more aggressively, and makes it available offline, and therefore forecast that Google sells 2 mn handsets per year in 2011 and future years.
Google does have plans to launch a lighter version of Nexus One in India soon, however, don’t expect that to jack up sales.
The biggest problem with Nexus One has been that it is an online only device. Google is yet to put the device in retail stores, even those of their partners like T-mobile. Thankfully, the Nexus One may arrive on the Verizon Wireless network later this month or early next month, and that may increase the sales a bit.
However, unless Google puts the device in stores, they will not see a significant growth in the market. It is time that Google learnt that brick and mortar stores do very well when selling mobile phones, than the online sales.
People who want to buy the phone, want to experience the devices before they make a decision to purchase it, promoting it online helps but it does not convert into sales.