Is Google’s NexusOne a big Failure

Looks like Google’s ambitious experiment with NexusOne is turning out to be a big failure. I’m sure this is not what they would have expected before the launch. I loved the concept of direct to consumer. But the statistics from Flurry shows it as a big failure. The Number of handsets sold is not very impressive. Having said that, there are so many different factors that determine the success of the handset. Maybe the price would have played a big role. Maybe the direct to consumer model is not a great option for USA market.

If you look at the above picture, the sales of NexusOne is pale compared to iPhone and Droid. The sales figure for Droid looks impressive compared to iPhone 1G and Nexus One. Apple had sold around 1 million 1G handset in 74 days, when it was originally launched in 2007. Compared to that, Droid fared better in the same time frame selling more than 1 millions handset. As we all know Droid uses Google’s Android platform. So it should be some good news for Google to cheer about.

According to flurry, here are three underlying drivers for Droid sales:

1. Consumer Perception & Demand: Motorola Droid launched over 2.5 years after the iPhone 1G. (Nov 2009 vs. July 2007). When the iPhone launched, consumers' concept of a mobile computing device as we now understand it, was very different. Since then, Apple has spent millions of dollars training and educating consumers about capabilities of such a device, which was no small feat especially after its first foray into the handset business (Motorola ROKR E1 in 2005). Until the iPhone was introduced, most consumers, especially in the U.S. had thought of their phones as, well, just phones. Finally, it's worth noting that the Motorola Droid could be considered Android's "third generation" handset, which benefited from generated awareness by preceding G1 and MyTouch 3G handsets.

2. Relative Subscriber Bases: Droid launched on Verizon, a larger network with more subscribers than AT&T, especially when considering AT&T's 2007 size (63.7 million at the time of iPhone launch) versus Verizon's 2009 size (89 million at the end of Q3). Additionally, there was pent up demand among the Verizon subscriber base for an iPhone killer, which is exactly how Verizon positioned the Droid. Finally, Verizon backed the launch with advertising support of at least $100 million.

3. Holiday Season Sales: Droid benefited from launching on Nov 5 and having its first 74 days lifted by the holiday season, which is the highest selling period of the year for handsets. Neither iPhone 1G nor Nexus One's first 74 days spanned a holiday period.