The Nexus One is proving somewhat controversial, and it may be even more challenging to market the device. Some analysts are even questioning whether people will buy the Google phone without the hands-on experience Apple offers to iPhone shoppers in its brick-and-mortar stores.
Beyond ordering from a carrier, Google is offering a new way for consumers to purchase the Nexus One -- on a web store it hosts. The store will also offer other Android-powered devices, but the Nexus One is currently the only product in the new store. And right now, most of the onus is on Google to market the device whose branding bears its trademarked colors.
"How is Google going to market this phone? How will Google support it? The marketing part is not going to be easy," said IDC wireless analyst Will Stofega. "If I were Google, I wouldn't rely on carriers. I'd look to what HTC is doing in terms of reintroducing its brand in North America."
Android Remains an Underdog
Nearly 70 percent of consumers plan to purchase a new mobile phone in the next 12 months, according to a recent survey from Phoenix Marketing International. And 90 percent plan to purchase a smartphone. That's good news for wireless carriers and handset makers, and could lead to more adoption of Android devices. But there is no guarantee for the Nexus One.
"The recent addition of the Android operating system into the marketplace and the associated 20 new handsets coming to market give consumers a plethora of smartphone devices from which they can choose," said John Schiela, president of Phoenix Marketing International's Converged Technology and Media Practice. "It is too early to forecast the impact on the market-leading RIM BlackBerry and Apple iPhone phones. However, with consumers needing to purchase costly data plans to use their devices, the wireless service providers will be winners regardless of the device purchased."
If anything, Android phones appear to remain the underdog in the wireless market. More than half of all likely mobile-phone purchasers plan to acquire a BlackBerry or iPhone within the next 12 months, according to Phoenix Marketing. Respondents over 35 years of age are more likely to choose a BlackBerry over the iPhone.
No Easy Sell
Noteworthy is the fact that just 14 percent of current mobile-phone subscribers said they would be likely to switch to a new service provider to get the smartphone of their choice.
With only a six percent top-of-mind consideration for HTC, the manufacturer of Google's Nexus One, the Google phone's direct sales will rely on the untested power of the Google brand in the consumer electronics hardware market.
"Nearly 80 percent of smartphone buyers report the price of the phone to be their major purchase consideration," said Schiela, "and so despite the freedom to select a service provider separately from the phone, a $529 price tag for a direct sale of Google's Nexus One may prove to be a hard sale among price-conscious consumers."
Stofega agreed that the unlocked version of the Nexus One, in particular, is no easy sell in the U.S. But the $179 Nexus One may not fly off the shelves, either. With Google partnering with multiple carriers, T-Mobile, Vonage, Verizon Wireless, and whoever else Google partners with may not feel compelled to spend heavy marketing dollars to push the device since it is so widely available.
"I don't think they've ever spent a marketing dollar. They don't need to," Stofega said. "If this is truly about competing with the likes of Apple and others, Google can't merely rely on what's worked for them in the past. They'll have to actively market this device."