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You are here: Home / Digital Life / Developers Snap Up Nexus One
Developer Demand Drives Nexus One Shortage
Developer Demand Drives Nexus One Shortage
By Mark Long / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
Although Google pulled the plug on consumer sales of its pioneering Nexus One in May, a "substantial" quantity of the Android-based smartphones has been snapped up by registered application developers in the past two weeks. In fact, Google said Thursday that the mobile device is selling so well that the Nexus One is currently unavailable.

"We blew through the initial inventory in almost no time, and they're back-ordered from HTC," noted Android Developers blogger Tim Bray. "Everyone appreciates that it's important to the platform to get phones in the hands of developers, so we're working hard on restocking the shelves."

AMOLED Shortage

The temporary hiatus in Nexus One availability is due in major part to a worldwide Active Matrix Organic Light Emitting Diode (AMOLED) shortage, Bray observed. According to iSuppli, the Nexus One's bill of materials costs $174.15 -- with the centerpiece the handset's advanced display.

AMOLED represented the sole display technology for which revenues increased sequentially in the second quarter of 2010 -- when DisplaySearch said both unit shipments and average prices increased. "This reflects the success AMOLED is finding in high-end smartphones" that are "demanding larger display sizes," the research firm's analysts said. "In the first quarter of 2010, the average screen size for AMOLED passed three inches, larger than TFT LCDs."

The Nexus One is valuable to developers because it arrives unlocked and runs the latest version of Google's Android OS -- known as Froyo, or Android 2.2. Developers "like unlocked phones because they want to put any version of the OS on it and then any app they like on it," said Al Hilwa, director of applications development software at IDC.

The unlocked devices are compatible with most 3G (900/AWS/2100 MHz) networks, but North American carriers AT&T and Rogers Wireless use different 3G frequencies. So users with SIM cards for these networks can only use the Nexus One to connect over 2G or EDGE.

Launched in January, the Nexus One never caught fire with consumers because Google tried to market the device directly. "Consumers are used to subsidies and like to pick up their phone and try it out," noted Gartner Research Vice President Carolina Milanesi. "You might order over the Internet," she said, but only after the customer had "gone into a store and picked one up."

Changing Strategies

Google is a software firm, so it wasn't surprising that the Nexus One wasn't comparable in design to Apple's iPhone, noted Lisa Pierce, an independent wireless analyst at the Strategic Networks Group. "This shows how important market expectations are to new product acceptance, even if the company is Google," Pierce explained. "The bigger the brand, the greater the expectations -- the market won't gravitate to something just because of the brand name."

Furthermore, the Google-centric strategy didn't respect how people currently use, or would like to use, their mobile devices and apps, Pierce observed. "People didn't change their behavior just because Google expected or wanted them to," she said.

Some smartphone vendors initially saw the Nexus One as unwanted competition from the very entity that was supposed to drive the Android platform overall, Milanesi observed. But Google's shift to a nonexclusive marketing strategy for Android has worked out splendidly.

Android recently overtook Apple's iPhone iOS to become the world's number-three advanced handset platform -- and the leading smartphone OS in the U.S. -- by landing in products that sell across many wireless service providers and have the backing of many device manufacturers at several different price points, Milanesi said. "Things might have played out differently had Google not abandoned its go-to-market strategy," she added.

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