Today, Google officially admitted that their experiment in the mobile space to create a provider-independent, web-only handset market was a failure. Most people were predicting such since Verizon and Sprint decided against carrying Nexus One on their networks.
Ever since their initial announcement earlier this year, this web-only store were fraught with many problems, and it showed that Google wasn’t set-up (and ready) for an end-user-oriented merchandise sales model.
They have been selling unlocked, unsubsidized mobile handsets online for several years, but that was for the developers who wanted a device to test their Android apps. Probably, Google thought that they could just expand what they had and that how different this expansion could be. And hugely different it was…
First, Google is now dealing with consumers, not developers. Developers bought their devices for development and probably not for their main devices since they would be playing with it and it may not work all the time. Developers are technically savvy and they can deal with many technical problems. However, consumers lack the knowledge and patience. And Nexus One was faced with such problems (the 3G problem which Google gave up on, the touch screen problems, and etc.), and forum-based support system which probably worked well with developers failed miserably with consumers.
Second, Google skimped on traditional marketing.. Consumers can’t commit to several hundreds of dollars on devices they haven’t seen. The case for Motorola Droid shows that what a well-funded marketing could do. But Google thought the word of mouth and their reputation alone could do what it did for the search/ad dominance. It is clear that Google lacks consumer marketing expertise internally.
Third, Google picked a fight unnecessarily with Goliths, Verizons of the World. In a way, I understand what they were trying to do, but it was an unnecessarily expensive way to go about it. Google might have felt invincible, but the telephony industry is more like a monopoly, and they didn’t have a chance without a government involvement.
If the U.S. mobile market was more homogeneous like that of E.U., I think it might have had a better result. However, the U.S. mobile market is segmented by different technologies and incompatible base-band frequencies, and the provider dictates what kind of devices can be on their network. Trying to cut these monopolistic Goliths out ultimately failed.
Anyway, I am sure Google will continue to update and sell developer devices online. So, it’s back to not competing with their customers (OEM handset manufacturers), to not spending time and money on dealing with consumers, and to (hopefully) concentrating on bringing a more consistent development environment for vast variety of Android devices.
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