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Summary:

By early measures, Google’s Nexus One appears to be a sales flop. More marketing would help, but so would support for additional carriers. Google announces just that today with a Nexus One model for both the AT&T and Rogers Wireless networks.

nexus one thumb

It shouldn’t come as a total surprise, but Google today launched a version of its Nexus One handset with support for AT&T’s 3G network. The unlocked phone is available directly through Google for the same $529 price as the T-Mobile version. With support for the 850/1900/2100 MHz bands, this model works also works on Canada’s Rogers Wireless network. And also like the T-Mobile model, the phone offers quad-band voice support for usage outside of North America. The only major difference between this version and the initial one is that Google hasn’t announced a subsidized price for use with AT&T. Customers can purchase the T-Mobile version at full price or for a subsidized $179 with a 2-year carrier commitment.

The timing of this availability is rather coincidental. Just today I read several reports that the Google Nexus One is a flop, but I think those thoughts are off-base. No, it’s not just because I purchased my own Nexus One. The phone isn’t the “flop” at all — it’s the first device that caused me to part with my iPhone. Instead, it’s the marketing model that should be under scrutiny, and even so, we have to give it time. The U.S. carrier market with its subsidization and locked devices, along with the long-term contract model is ages old. Google isn’t going to change the model overnight, but by offering its superphone on more carriers, it stands a better chance at making that change. Let’s see how the Nexus One sales figures look three months down the road now that the device is on the second largest carrier in the U.S. By then we should see availability on the Verizon Wireless network with the same direct sales model, making the phone available on three of the top four U.S. networks.

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  1. Richard Garrett Tuesday, March 16, 2010

    More effective marketing would have resulted in more sales but possibly more problems, too. From what I’ve read, neither Google nor T-Mobile were fully prepared to deal with customer issues. By tamping down sales, perhaps Google has given itself the opportunity to better understand what needs to be done to scale the product and model.

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    1. Great point, Richard. I see the whole approach very similar to Google’s beta software iterations — learn, adjust, repeat.

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      1. I’d be happy to beta test Google’s Nexus One… (for free, of course, just like gmail).

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    2. Exactly! Not fully prepared is an huge understatement, but even so, their support woes sure do pale in comparison to, say, Toyota’s.

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  2. So is there anything (other than that little $529 cost factor) that would prevent me from getting the AT&T 3G compatible model and then use it with my iPhone 3G SIM? I am fairly certain it will work, but will AT&T’s network know that my SIM is now in a non-iPhone, and thus start charging me extra for data or something like that?

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    1. Good question and one that I’m already seeing around the web. The phone is obviously designed to work with any AT&T SIM and data plan, so yes it will work. Since AT&T isn’t provisioning the phone, I really don’t see how they can determine if you have an iPhone SIM in a Google Nexus One, but that’s just a guess on my part.

      This type of confusion is definitely a problem for consumers, but I wonder if Google is almost trying to create it. That could force the hands of U.S. carriers for faster change — or it could totally backfire on Google.

      FWIW: the SIM for my Nexus One was provisioned as a Windows Mobile device simply because T-Mo wasn’t ready to handle the Nexus One. It worked — and still does — just fine. Personally I’m tired of all of these “different Internets”, i.e.: Android plans, iPhone plans, WinMo plans, etc…. there should be smartphone plans and that’s it.

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      1. I believe like other situations with the iPhone SIM … it can go easily into other devices, but another GSM SIM will not work in the iPhone.

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      2. @Jonathan — other GSM SIMs won’t work in the iPhone unless you unlock it (but I assume you knew that). But once the phone is unlocked (mine is, for international travel), other carriers’ SIM should work. There are lots of people who use an unlocked AT&T iPhone on T-Mobile.

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  3. Thank god someone on the network (and frankly, it comes as no surprise at all that it is Kevin Tofel) is at least tentatively exploring the notion that maybe it has all been on purpose!

    Now, I’m not an analyst, but I don’t think it takes one to look at the N1 launch and think, “That seems like a dumb move, but Google has a TON of smart people working there so maybe there is more here than meets the eye. Maybe short-term sales (i.e., the old marketing/sales model) isn’t what Google is aiming for.”

    Plus, when you start to assume that it has all been intentional, the immediate and fascinating question is, “Why?” Now that is an interesting question to explore and makes pieces like Verizon’s $100m on the Droid push shortly before the N1 release, Jobs’ tantrums, the relatively controlled disaster of Google phone support (as opposed to say, the widespread nightmare of the Toyota recalls) take on a new light. Maybe, just maybe, they knew what they were doing from the get-go.

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    1. Precisely. Google is taking an approach where either outcome will only help them: if Nexus One is a hit, Google is a winner; if Nexus One is not a hit because other manufacturers and carriers made better phones with better features, Google would’ve still accomplished its objectives. We have seen Google play these types of ‘heads, I win; tails, you lose’ games before. The 700 MHz auction comes to mind. We have to be extremely careful before passing snap judgments and jumping to conclusions about Google.

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  4. Welcome aboard! And happy multitasking my AT&T friends.

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  5. In Europe, customers can pay full-price for a phone and buy a contract-free subscription (or prepaid) for less money. With AT&T, you can either get a subsidized phone and pay for it with a higher monthly fee, or buy a phone at full price… and still pay for the subsidy. I don’t see this choice as particularly attractive.

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  6. Could someone enlighten me (this is a serious question) – What’s the benefit of an unlocked phone if you can’t take it to another network? You can get out of the 2 year contract by paying some early termination fee, so I feel like I’m missing something with the nexus one.

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    1. Damn good question. You can use the AT&T phone w/T-Mobile or another GSM network, but you won’t get 3G access on some of them. As you point out, this does lower the value of having an unlocked phone.

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  7. For Google’s model to really gain traction, consumers on the big three carriers need to call, complain, write letters, and threaten to leave (even bluff) if those carriers if they don’t institute a tier of plans for unsubsidized phones! Google can’t force the carriers to do it, because it’s not in their interest.

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