Nexus One Sales Low, Operators Have Power

In comparison to the iPhone and Droid the Nexus One hasn't scratched the surface of penetration Google might have hoped for when it announced the handset. Whilst the iPhone and Droid have sold in excess of 1 million handsets in their first 74 days, the Nexus One in comparison has only shipped around 135,000. So why is this the case?

Removing the case of the actual time when the Nexus One was announced and released in comparison to the iPhone and Droid the only other major issue is the availability of the Nexus One. Whilst it is essentially available in more places on initial release, it's available without being subsidised (with the exception of the US & T-Mobile). This is crucial because the people in general do not like to buy mobile handsets outright. They prefer to purchase it via a contract agreement over several months, it's safer for them and easier to manage. The average Joe does not have enough money left over every month after bills and expenses to buy a SIM free handset costing over £300+. Especially more so in this recession we're experiencing.

The consumer has been used to getting free and cheap subsidised handsets for so long that the thought of paying for a handset almost comes as a shock. The amount of time I've heard someone complain about the fact that their upgrade is costing them money and why their handset isn't free is too many. As the mentality of the consumer has been influenced by the operator for so long, the expectancy that every handset should be free on a tariff and on upgrade is natural. Hence why this is the major problem the Nexus One is facing currently. With no operator deal yet, the average consumer just won't buy a handset outright any more. It's a rare occasion. Only enthusiasts and those desperate for change will do so, EVEN if buying a handset SIM free is cheaper in the long term than an 18 or 24 month contract. They just don't have that cash to hand nor are they willing to part with it. That is the age we are in right now.

The lack of sales is down to Google badly timing their availability of the handset itself and their stance to directly sell globally without any major subsidy involved, especially in Europe. In the long term the Google model will eventually have to change or the mentality of the consumer will, either way one things gotta give.

Posted in: Android,Nexus One