Google pulling out of selling handsets directly

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freitasm

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#61376 15-May-2010 09:45

It's a shame even Google can't really compete with retail channels dominated by mobile operators...

http://googleblog.blogspot.com/2010/05/nexus-one-changes-in-availability.html

"More retail availability. As we make Nexus One available in more countries we’ll follow the same model we’ve adopted in Europe, where we're working with partners to offer Nexus One to consumers through existing retail channels. We’ll shift to a similar model globally.

From retail to viewing. Once we have increased the availability of Nexus One devices in stores, we'll stop selling handsets via the web store, and will instead use it as an online store window to showcase a variety of Android phones available globally.

Innovation requires constant iteration. We believe that the changes we're announcing today will help get more phones to more people quicker, which is good for the entire Android ecosystem: users, partners and also Google."

timmyh

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#330361 15-May-2010 12:21

This is an interesting space in the balance of power between the vendors and mobile operators. I think the timing was too soon for such a radical shift, but it likely will happen in time. Your ISP doesn't subsidise your PC. Here are a couple of challenges I think had an impact for Google:

1. It was competing against other OEM Android handsets, some of which were as good or better, which were being subsidised through the mobile operators so seem much cheaper. And mobile operators provide more network value (minutes, text, data) in contract plans vs. PrePay. Even if you purchase the handset outright you would just forgo the subsidy. There are a few operators overseas who are doing a 'bring your own handset' version of their plans meaning it has a cheaper monthly cost to reflect the lack of subsidy.

2. I don't think Smartphones are yet as commodified as PC's and they are more personal. This means that as Smartphones expand further into the mainstream market prospective customers do want to see, feel and play with the device they are committing to for the next 2 years or more. You can only do that in a store. And of course you might need to ask questions about the status of your contract.

3. Support model still seems awkward, i.e. is it Google who is supporting your mobile experience or the mobile operator you have the plan with?

Google tried this as an experiment - and so is Apple now with the iPad. However it seems that you can only buy the iPad from Apple and that you then insert whatever operator SIM card you want and use their plans. Apple are not allowing the mobile operators to lock customers in with contract and subsidy. The difference is this is the only model Apple is allowing and I suspect it will work because it is a computer which users expect to pay for, rather than a phone which they don't.

old3eyes

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#330373 15-May-2010 13:02

Very good points Tim

The main problem in the US is that they are so used to heavily subsidized fones and 2 year plans that the concept of paying say $500 for a fone is foreign to them unlike here where subsidies are way less and you pay virtually the retail price.. I believe the new HTC Evo 4G will cost in the US on a plan $200 or unlocked price $450 some what cheaper than the N1. . Catch is if you want all the 4G bells and whistles it will cost you $110 / month according to CNet..

Regards,

Old3eyes

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#330687 16-May-2010 17:47

The signs were there that this was imminent and I was certainly thinking about it over the past week as first two major telcos (Sprint and Verizon) moved to sell Android-based smartphones directly rather than (in part) through Google. Then, two senior Android people left Google - including the buy responsible for Nexus One marketing, Eric Tseng.

Google had also already indicated the Nexus One would be available via retail in the future in order to extend reach into more countries.

Still...I hadn't expexted Google to withdraw entirely from online marketing. The model suited me (and other "early adoptors") in many ways. I'd seen the phone in videos. Read the spec sheet. Read several reviews. There isn't a thing I have discovered since buying the phone that I didn't know of beforehand.

On that basis, I bought two (one is gift) from Google and I have been very happy with them. I would repeat the purchase without hesitation.

But as others have pointed out, someone willing to do the research, think about the possibilities and take the consequent risks is NOT a mainstream phone user.

If anything, now Google will have some feel for the size of the "early adoptor" community....and quite a lot of information about its capabilities. Even if one has rooted their Nexus One, the phone still phones home to report various things (unless specifically told not to).

The announcement also appears to mean we are more likely to be able to buy a Nexus One (or successors) at retail...and for Kiwis that will mean, as usual, either directly from a telco here or from online resellers OTHER than Google - like Clove, Expansys or any of a long list of other overseas market 'facilitators' very happy to sell to anyone, anywhere.

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freitasm

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#330732 16-May-2010 20:46

Google is not pulling out of "marketing", they are pulling out of "selling". They plan to continue using the domain to showcase Android handsets, which is effectively "marketing".

Linuxluver

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#330897 17-May-2010 13:49

freitasm: Google is not pulling out of "marketing", they are pulling out of "selling". They plan to continue using the domain to showcase Android handsets, which is effectively "marketing".

Absolutely correct. Thanks for putting me right on the correct wording. :-)

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oxnsox

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#330912 17-May-2010 14:32

Google have to continue the marketing because handset manufacturers will only promote their own Brands not the Platform.

I wonder if Google felt that 'selling hardware' bought it too close to users/customers. More typically they seem to prefer to be seen as the good guys down the back of the bus giving us options over the corporate dragons. But more correctly they are about managing and massaging content in a non invasive (and profitable) way.

What ever their real reasons for moving away from hardware and back to their more traditional role, it may mean we get to see more Android devices locally available thru supported Telco channels.

timmyh

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#330916 17-May-2010 14:45

I'm still intrigued as to how it will work for the iPad.

Will you order the mobile operator mirco-SIM card when you purchase the iPad through Apple and then purchase the mobile plan from the iPad itself - which is the U.S. situation with AT&T where there is only one mobile operator with the right frequencies?

Or will you simply purchase the micro-SIM and plan separately from the mobile operator shop, put it into the iPad and have the iPad automatically configure the APN, or manually edit it if you have to. In other words iPad would work on any GSM network and not care about official Apple reseller status.

The second option would be good 'cause you could purchase local pre-pay SIM cards when traveling with local data plans.

Tried to see by doing a pre-order via Apple Australia but didn't see any mobile operator selection steps - of course I didn't actually get right through to the end...

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Linuxluver

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#330989 17-May-2010 18:16

timmyh:

The second option would be good 'cause you could purchase local pre-pay SIM cards when traveling with local data plans.
Tried to see by doing a pre-order via Apple Australia but didn't see any mobile operator selection steps - of course I didn't actually get right through to the end...

I have a feeling we will soon see other tablets with tens of thousands of apps, more flexible networking options and supporting (across the range) more network operators.

Apple won't be the only game in Tablet Town for long.

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timmyh

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#330998 17-May-2010 18:48

Yes I am sure you are right. Will all these devices need the approval of the mobile operators to use their network? Until now a mobile operator retains the right to deny access to any non-approved devices.

Does a PC modem or router need a Telepermit to use ADSL?

old3eyes

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#331011 17-May-2010 19:13

timmyh: Yes I am sure you are right. Will all these devices need the approval of the mobile operators to use their network? Until now a mobile operator retains the right to deny access to any non-approved devices.

Does a PC modem or router need a Telepermit to use ADSL?

Carriers these days don't care about SIM bases mobiles. Just pay for the SIM and go..

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Old3eyes

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#331046 17-May-2010 20:26

timmyh: Yes I am sure you are right. Will all these devices need the approval of the mobile operators to use their network? Until now a mobile operator retains the right to deny access to any non-approved devices.

Does a PC modem or router need a Telepermit to use ADSL?

IIRC, if it plugs into the phone socket, it needs a Telepermit. Otherwise, I guess a cellco could refuse service to a number if they determined the device was messing up their network for some reason....more likley defective in manufacture than in design. But with so many super-cheapo semi-functional (dual-band GSM with no 3G?) phones around from China, I guess we can't rule out shonky design either.

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