First Month Nexus One Sales Slow, Says Analytics Group
By Scott Morrison, Of DOW JONES NEWSWIRES
SAN FRANCISCO -(Dow Jones)- Google Inc. (GOOG) sold about 80,000 Nexus One
mobile phones in its first month on the market, roughly one-eighth the number of
units the original Apple Inc. (AAPL) iPhone sold in its debut month, according
to analytics group Flurry Inc.
The slow sales figures highlight the challenges Google faces as it attempts to
establish a new model for pricing, marketing and distributing mobile phones. The
Mountain View, Calif.-based Internet giant broke with conventional sales models
when it launched its smartphone, saying it would sell the unit directly to
consumers without a cell phone company contract.
Nexus One sales appear to have been steady week over week during its first
month, according to Flurry's analysis. The company made its estimates by
measuring mobile applications usage and then extrapolating overall ownership.
By contrast, Apple's iPhone got off to a very strong start when it debuted in
mid-2007, selling an estimated 600,000 units in its first month, according to
Flurry. Apple announced it sold 1 million iPhones during the first 76 days they
were on sale.
Meanwhile, Motorola Inc.'s (MOT) Droid, which, like Nexus One, is built with
Google's Android mobile software, sold 525,000 in its first month after
launching last November, according to Flurry.
Google didn't immediately respond to phone calls seeking comment.
After months of speculation, Google took the wraps off of its so-called "
superphone," built by Taiwan's HTC Corp. (HTCXF, 2498.TW), on Jan. 5. The
company also announced it would sell the device directly to consumers through a
Web store.
The Internet giant hopes it can convince other operators to offer wireless
plans through its Web store, enabling Google to establish a cheaper and more
efficient model for the way mobile phones are sold.
But observers were struck by the price of the Nexus One, which sells for $529
without wireless service. Customers can also buy the phone for $179 if they
commit to a two-year contract with Deutsche Telekom AG's (DT) T-Mobile USA,
currently the only carrier that provides a Nexus One wireless plan.
Observers have also been skeptical about Google's decision to spend virtually
nothing advertising the Nexus. Google briefly pitched the phone on its home
page, but the link quickly disappeared. Apple and carrier AT&T (T), in contrast,
have spent heavily to promote the iPhone on TV, radio and the Internet.
Perhaps more importantly, the early hype around the Nexus was quickly
overshadowed by a series of reports about connectivity snafus, customer service
shortcomings and eye-opening "recovery" fees. Those concerns might have prompted
some potential buyers to wait until Google and its partners sort out any issues.
Google executives have defended their decision, noting the Nexus One is a
first device and part of the company's long-term mobile strategy.
"What the Nexus One is really about is a new way of buying a phone," said
Chief Executive Eric Schmidt in a recent conference call. "The Nexus One is
simply the first of a series of examples where you can essentially purchase a
phone online from one or multiple manufacturers and have it just work. We think
that's a natural evolution of a particular model."
Among other factors that likely have hampered sales of the Nexus One is
Google's decision to launch the device right after the critical holiday shopping
season, said Peter Farago, vice president of marketing at Flurry.
"A lot of the people who were in the market for a phone, either for themselves
or for a gift, already satisfied that demand," said Farago.
-By Scott Morrison; Dow Jones Newswires; 415-765-6118; scott.morrison@
dowjones.com
(END) Dow Jones Newswires
02-05-100715ET
Copyright (c) 2010 Dow Jones & Company, Inc.
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