
It's been no secret that the initial sales of the Nexus One were less than overwhelming. It was estimated that there were only 20,000 phones sold in the first month. To put that in perspective the Motorola Droid sold almost 500,000 units the first month.
On the heals of these "poor" sales numbers the financial firm Goldman Sachs has lowered it estimate of Nexus One sales for 2010. At first, Goldman predicted Google would sell over 3.5 million units in 2010 but now they have sharply decreased that number to just over 1 million. But why did they drop their estimate so much?
Well here's a quote from Goldman Sachs
" We previously estimated that Google might sell 3.5 mn Nexus One units in 2010. Initial data-points were disappointing, possibly due to limited marketing and customer service challenges. Flurry estimated (based on mobile traffic) that Google sold 20,000 in the first week, and 80,000 in the first month, both annualizing to 1.0 mn. We forecast that Google sells 1.0 mn Nexus One units in FY2010, benefiting from US carriers other than T-Mobile, and non-US carriers such as Vodafone, promoting the device too, but suffering from limited marketing activity. We assume that Google rolls out a second Nexus handset, markets it more aggressively, and makes it available offline, and therefore forecast that Google sells 2 mn handsets per year in 2011 and future years."
By reading their statement it seems the lower estimates are a result of the marketing tactics taken by Google to promote the Nexus One. Which is something I would have to agree with.
When you compare the launch of the Nexus One with the Motorola debut of the Droid you see some large difference. I'm sure everyone remembers when they started seeing the ad flurry for the Droid prior to it's launch. It seemed as though you couldn't look anywhere without seeing an ad for their new phone. All these ads built a rabbid crowed of Verizon customers and would be customers that wanted the Droid as soon as it came out. Even to this day you still see commercials for the Droid on a regular basis.
Now when you look at the launch of the Nexus One you see an entirly different story.
I consider myself to be up on the majority of techie stuff that goes down and I always like to know what is coming up in the Android world. I remember starting to hear rumors from different tech sites about the new Google "Super Phone". That was followed by Google providing one to all their employees which lead to a few videos poping up on YouTube. From that point came a lot of speculation about the phone in the tech communities. But no one was sure when it was actually supposed to be released to the public.
A short time after Google held a press launch event and put the phone up for sale that same day. There was no normal media advertising to speak of. In fact it was said by Andy Rubin, one of the Android creators, that marketing on television isn't as good a strategy for connecting with customers as is leveraging Google's own brand to do the marketing.
Google's strategy in the launch could be blamed for the low sales number. But then again no one knows exactly what they were shooting for here. But from the sounds of what Andy said they seemed to think just advertising through their own brand would knock it out of the park.
But there would be other motives.
The Nexus One being the first phone to be sold through Google's online store could mean it was nothing more than an experiment. Possibly all they wanted to do was get a phone to market that could be considered the best smart phone to ever be released to let it be know that Google would soon be a force to be reckoned with. If that were the case they may not have planed to sell millions of units.
But on the other hand, Google may have felt the perfect sales strategy was just word of mouth and leveraging their own network. If that was the case than they really dropped the ball.
But the only one that knows that for sure is Google and only time will tell what they plan on doing next.
Do you think Google failed miserably with their jump into smart phone sales or do you think it was just a practice run for something much bigger? Let us know what you think in the comments.