Showing posts with label Nexus One. Show all posts
Showing posts with label Nexus One. Show all posts

Monday, May 17, 2010

Google Gives up Trying to Sell Nexus One Online

NZ Herald

 
SAN FRANCISCO - Google will close an online store that it set up to sell its Nexus One phone and rely on traditional retailers instead.

The shift ends Google's attempt to develop a new sales model for the mobile industry.

Google had hoped to shake things up by establishing its online store as the only place to buy the Nexus One, which the company hailed as a "super" phone when it debuted amid fanfare in January.

But consumers didn't embrace the idea of buying a phone without any hands-on experience.

"As with every innovation, some parts worked better than others," Andy Rubin, a Google executive overseeing the Nexus One, wrote in a blog post.

Rubin said Google will stop selling the Nexus One in its web store as soon as it lines up other US retailers to carry the device.

Google hasn't disclosed how many Nexus One units it has sold so far.

Nexus One is just one of many different smart phones that rely on Google's free Android operating system.

The alternatives also are proving to be an obstacle for the Nexus One.

Two major carriers, Verizon Wireless and Sprint Nextel, recently decided not to support the Nexus One because they prefer other Android-powered phones.

Monday, January 18, 2010

Hey Google, Anybody Home?

NY Times

Google’s celebrated algorithms may power the Web’s most popular search engine, but they have not yet been programmed to answer a call when a customer has a problem.

New owners of the Nexus One, the latest touch-screen smartphone to run on Android, Google’s mobile operating system, have found themselves at a loss when it comes to resolving problems with the handset. They cannot call Google for help, and the company warns that it may take up to 48 hours to respond to e-mail messages.

Unlike other phones that run on Android, like the Motorola Droid or the T-Mobile G1, the Nexus One was developed and branded by Google and is sold directly by the company to customers.


But ever since the phone went on sale Jan. 5, customer forums have been filled with a cacophony of gripes about the Nexus One. And Google, more accustomed to providing minimal support for its free services, has been unprepared to deal with the higher service expectations of customers who are paying as much as $529 for its high-end smartphone.

Early buyers of the device, like Kiran Konathala, a 27-year-old database programmer in Long Branch, N.J., have complained of dropped calls, plodding download speeds and connectivity snags. “The hardware is great, but the software is a mess,” he said. “It’s not been a happy experience so far.”

The phone presents a puzzle for users like Mr. Konathala: Who do you call when you have a problem?

Most people use the phone on T-Mobile’s network, which offers a subsidy if a customer buys a contract, and the phone is made by HTC, a major Taiwanese manufacturer. But it is sold exclusively by Google through a special Web-based store.

Despite its central role in the process, Google does not appear to have built a significant infrastructure to provide customer support. There is no phone number for support, for example, and customers who send an e-mail message may wait for days to hear back.

“So far, I have yet to hear from an actual person,” said Mr. Konathala, who first contacted Google for help on Jan. 6. “All I’ve gotten are canned replies.”

Katie Watson, a Google spokeswoman, said no one was available to speak about the service problems. But in an e-mail statement, she said, “Solving customer support issues is extremely important to us.”

She added that Google was working to address problems quickly. “We’re flexible and prepared to make changes to our processes and tools, as necessary, for an optimal customer support experience,” she wrote.

Andy Rubin, Google vice president for engineering in charge of Android technology, acknowledged last week that the company needed to improve. “We have to get better at customer service,” Mr. Rubin said during an on-stage interview at the Consumer Electronics Show in Las Vegas. Instead of taking three days to respond to e-mail messages, he said, “We have to close that three-day gap to a couple of hours.” But Mr. Rubin said that the release of the Nexus One had gone smoothly.

Some analysts said that Google appeared to have misjudged the service demands that come with being in the business of selling sophisticated gadgets.

“They may have been clouded by their own personal experience and way of thinking about how they deal with technology,” said Charles S. Golvin, an analyst with Forrester Research. “They’ve got a long way to go in terms of understanding all the components of the retail process — not just selling phones but the after-sales care — to be as skilled in this endeavor as they are in the rest of their endeavors.”

A spokesman for T-Mobile, David Henderson, said that although the Nexus One was not being sold through T-Mobile retail stores, sales representatives knew enough about the family of Android-powered devices to help customers with some questions.

T-Mobile, which addressed the connectivity problems in its support forums, said it was working with HTC and Google to determine the root cause of the problems some Nexus One users were reporting.

Google is not unfamiliar with the business of charging for products. More than a million businesses pay to place ads on Google’s search engine or on Google’s vast network for publishing partners.

But the Nexus One is Google’s first foray into selling hardware directly to consumers.

Relying heavily on automated responses and Internet forums to handle customer service queries may not be sufficient for that kind of device, said Soumen Ganguly, a principal at Altman Vilandrie & Company, a Boston consulting firm that specializes in the communications industry.

“Selling someone a piece of consumer electronics is a very different ballgame,” Mr. Ganguly said. “If you’re a cellphone user and this is your primary phone, waiting one to two days for a response is a long time.”

With the Nexus One, Google aims to extend the reach of its Android operating system for mobile phones. And it hopes to eventually change the retail model of the cellphone market in the United States by becoming a major seller of Android phones made by various manufacturers.

But if that is the goal, it will need to impose a better customer support strategy, Mr. Ganguly said. “Right now, they’re leaving troubleshooting up to the customer,” he said.

Some analysts said the early missteps were fixable. But a black eye from customer complaints could hurt Google’s longer-term goals.

“Having a consumer backlash because of their lack of customer support is not going to help its cause,” said Youssef Squali, an analyst with Jefferies & Company.

Tuesday, January 12, 2010

Google Building Hardware Business Around Nexus One

eWeek


Google wants to build big mobile hardware margins from the Nexus One smartphone and future Android-based devices, such as netbooks and tablets, said BroadPoint AmTech analyst Benjamin Schachter. He believes Google desires to build up a mobile hardware business around the Google Webstore. This would ideally be icing on the cake for Google's current mobile search and display ad model. Schachter said it will not state this goal because it fears damaging the powerful brand Google has cultivated over the last decade.

Many analysts view Google's Nexus One as a vehicle that will enable the company to reach millions of users of the smartphone with mobile search text and display ads, and possible even click-to-call ads.

BroadPoint AmTech analyst Benjamin Schachter is one of those analysts. Schachter has a hunch that, while the search giant won't admit it, Google hopes to actually build up a mobile hardware business around the Google Webstore it uses to sell the Nexus One and future Android-based devices.

Consumers can't walk into a retail store and buy the Nexus One at present. As the merchant of record, Google is selling the HTC-built, Android 2.1-based Nexus One online through its Webstore for $529 unlocked and unsubsidized, or $179 for a two-year contract with T-Mobile. Hardware parts for the Nexus One cost $174.15, according to iSuppli.

Noting that the Nexus One smartphone is the first of what could be a slew of mobile devices Google sells, Schachter said in a Jan. 6 research note, "We think that Google's unstated goal is to potentially build its mobile hardware business into a meaningful revenue driver.

"Mobile is a big enough market to move the needle for Google, and we believe success here may encourage the company to introduce more hardware such as netbooks, tablets, and other devices. In our view, yesterday was quite literally day one for Google's long-term mobile ambitions."

However, during the question-and-answer session at the Nexus One launch event Jan. 5, Mario Quieroz, vice president of product management at Google, said that while the retailing aspect is important, it's "another channel" and not intended to replace other channels.

Andy Rubin, vice president of engineering for Android, deflected questions about Google trying to make money on the HTC-built hardware, noting that while there is some opportunity to make some margin on the unit sales, "that's not what we're trying to do here."

"Our primary business is advertising," Rubin said. "This superphone category is just a great way to access the Internet and along with that comes our normal business model of advertising. ... If you want the best possible Google experience, you'll come to the store, grab the device, and [the Google] advertising model takes off."

So why isn't Google coming clear about its alleged mobile hardware ambitions? Self-preservation. Schachter said it will not state this goal because it fears damaging the precious, powerful brand Google has cultivated over the last 11 years if the company fails.

Indeed, there are always risks when companies, particular software-driven businesses, double as purveyors of hardware. Jefferies Research analyst Youssef Squali wrote in a Jan. 6 research note that Google's retail model could depress margins:

    "We believe that as the 'merchant of record,' Google is likely carrying the inventory risk for a business that's likely to generate profitability that is substantially below the company's traditionally 60 percent-plus EBITDA margin."

Yet Schachter sees another silver lining in the Webstore. He believes that by offering the Nexus One and other devices through its own store, Google could diffuse some of the fragmentation plaguing Android, for which multiple operating system versions—1.1, 1.5, 1.6, 2.0 and 2.1—exist.

He said that by infusing its smartphones with the most current software, Google can encourage other carriers and OEMs to essentially keep up with Google and update their own Android devices with the latest software versions as well. The Webstore, backed by Google's promotion on its front page and elsewhere, should help in that regard.

Still, mobile advertising is the business model that most financial analysts are rallying around in the wake of the announcement. Squali sees the Nexus One and Webstore as another way for Google to expand its mobile search and apps footprint, which can then be monetized via ads.

"During the 3Q09 call, Google saw 30 percent quarter-over-quarter rise in mobile searches," Squali wrote in a Jan. 6 note. "We expect Google to monetize this hyper-growth in search volume via location-based search ads, which are typically more attractive to advertisers, given the 'in-market' nature of such consumers."

Eventually, thanks to the direct-to-consumer model of its Webstore, Google could gain some control over how consumers buy mobile device and services, enabling it to offer VOIP or ad-subsidized mobile devices in the future.

Nexus One Components May Cost $174

Business Week
Analysis by iSuppli suggests that parts for the Android-based smartphone made by HTC may be less expensive than those in Motorola's Droid

From the outside, the Nexus One and Droid smartphones have a lot in common. Both run Google's (GOOG) Android operating system software and have touch-sensitive screens. Each is designed to compete against Apple's (AAPL) iPhone.


On the inside, however, the phones boast some key differences. The Nexus One, introduced on Jan. 5, may have been cheaper to build, according to analysis of the devices by market research firm iSuppli. The components used to build the Nexus One may cost about $174 while the Droid's cost about $185, according to iSuppli estimates. Google sells the Nexus One without a wireless service contract for $529, while the Droid is available contract-free from Best Buy (BBY) for $599.

Analysts use so-called teardown analysis from iSuppli and other researchers to assess how much profit a manufacturer or service provider may get from sales of a consumer electronics device. Smartphones are expected to represent 38% of all mobile devices sold in 2013, up from 14% in 2009, according to Gartner (IT). Demand for such advanced mobile phones, which provide access to e-mail, the Web, games, and various software-based tools, has surged in the years since Apple introduced the iPhone. Analysis from iSuppli focuses on components and doesn't include additional costs such as labor, marketing, and distribution.

HTC makes the Nexus One under contract for Google. T-Mobile USA, the U.S. mobile phone arm of Deutsche Telekom (DT), sells the Nexus One with a two-year service plan for $179. Motorola (MOT) makes the Droid, which is being sold through Verizon Wireless, a joint venture of Verizon Communications (VZ) and Vodafone (VOD), for $199 with a two-year service contract.

The Nexus One's parts may be cheaper because of the price of its memory card, says iSuppli principal analyst Kevin Keller. The Droid boasts a 16-gigabyte flash memory card that goes for about $35, while the Nexus One is sold with a four-gigabyte card that costs about $8.50. The Nexus One analysis is preliminary and subject to revision, iSuppli says.

Qualcomm pushing TI out?

Wireless chipmaker Qualcomm (QCOM) is a winner in both phones. With the Nexus One, Qualcomm's Snapdragon chip handles the connection to wireless networks and is responsible for running the software. Keller estimates the cost of the chip at $30.50, or about 18% of the device's component cost. For the Droid, Qualcomm also supplied a less-advanced wireless chip that cost about $14.

Qualcomm competitor Texas Instruments (TXN) landed four chips on the Droid, including a $13 version of its OMAP chip. TI's share of Droid components amounts to about $23, or 12% of the total. TI may have landed no more than $2 of chips in the Nexus One, iSuppli says. "As Qualcomm has been evolving its technology and adding the ability to handle the applications as well as the wireless connection, TI is getting pushed out," Keller says.

Synaptics (SYNA), the Santa Clara (Calif.)-based company that specializes in touch-sensitive technology, is supplying several pieces of the touch-enabled screen in the Nexus One, Keller says. Atmel (ATML), a San Jose-based chip company, supplied the chip that controls the touch interface on the Droid.

Chipmaker Broadcom (BRCM), based in Irvine, Calif., supplied a single chip to handle both Bluetooth and Wi-Fi features on the Nexus One. TI and Triquint Semiconductor (TQNT) of Hillsboro, Ore., together supplied three chips that handled those features in the Droid, Keller says.

One chip common to both smartphones, and used in Apple's iPhone 3GS as well, drives the onscreen compass. All three use compass chips from AKM Semiconductor, the San Jose-located subsidiary of the Tokyo-based industrial and electronics company Asahi Kasei.

Google and Motorola representatives declined to comment on iSuppli's reports.