Google has decided to close its online store and the Nexus One will no longer be available as an unlocked carrier-free product. The audacious experiment it represented was a radical break from the existing model of how consumers buy phones. It failed; we don’t want a radical break.
There’s a few lessons to be learned in the overall Nexus One experiment. With perhaps 200,000 Nexus One handsets sold since early January, the web store closure indicates that consumers aren’t ready to purchase a new handset sight unseen. While there are several online venues where one can purchase a phone — Amazon and Wirefly come to mind — all of the phones available online can also be found in brick-and-mortar stores, where consumers can get some hands-on time with them to help decide which model they is best for them.
Then there’s the marketing issue — there really wasn’t any. Sure, there were Google ads on the web, but no mainstream U.S. media outlets carried ads showing off the phone. How else would a potential customer even know the Nexus One was available for purchase? Contrast that with the $100 million ad campaign that Verizon sunk into the Motorola Droid launch and it’s easy to see why the Droid outsold the Nexus One by a factor of nine in the first 74 days it was available.
Finally, it seems clear that the majority of U.S. consumers still aren’t ready to adopt the unsubsidized handset model that Europe and other areas use. People here gripe about their 2-year contracts, but aren’t willing to go contract free by paying full price for a new handset. I’m done griping, as evidenced by my own purchase of a Nexus One for $529 in January. I have the freedom to switch phones or carriers without an ETF, or Early Termination Fee, and I pay $20 a month less for my plan than a subsidized customer does for the same plan. Either I’m still in the minority or I was raised in Europe in a past life.