Not Everyone Gives Google a Pass

"I don't think Google ever really wanted (or needed) to sell millions of phones. For them it was about getting an early kick start to the market and they did that by selling a couple hundred thousand. I think they would be happy to have HTC and Moto carry the ball and get Android phones out there in big numbers.

"Also, remember that most carriers want a customized version of phones with their own app load and modified UI, and Nexus One did not offer that. HTC will provide that for the carriers, as it has done often before."

Not everyone agrees with Gold and Llamas. Forrester Research analyst Charles Golvin said Google's retail phone effort is indeed a failure to date, noting that consumers in the United States just aren't ready to buy phones sight unseen.

"I think [Google] had two purposes - to begin to alter the retail model for phones, and to provide an exemplar of what Android could do. I don't think U.S. consumers are ready for the retail change (though things are indeed changing with the expanding prepaid market), and other devices like the Incredible are eclipsing what the Nexus One can do."

Golvin also noted Google did little-to-no advertising of the product, which was a large contributor to the device's lack of uptake.

In that light, it's fair to ask why Google would think carriers would support an Android device whose sale it can't control when it can just contract to have phone makers build phones on the open-source platform.

Golvin said Verizon and Sprint simply want to test the waters of alternate retail channels, and any sales that result in contract renewals or acquisitions are a bonus.

"Verizon Wireless definitely plans on having Android be a big part of its strategy, but also wants to control the ecosystem," Llamas said. "Same story with Sprint, In the case of T-Mobile, it supports the Nexus One, perhaps due to the revenue data potential, and that users might be interested in other Android phones (MyTouch 3G, G1, etc.)."

Despite his reluctance to deem the Webstore and Nexus One failures, Llamas expected more from Google's new initiative.

"What I was looking forward to was how Google would have been able to control its own destiny as owner of hardware and software similar to RIM and Apple," Llamas said. "Those two companies have been successful in launching devices and updating software, while building their respective brands."

Regardless, it is clear the Nexus One has been cannibalized by HTC's Droid Incredible on Verizon and EVO 4G on Sprint.

While both feature the same operating system as the Nexus One, the devices boast other perks and features that make it a step up from the device they are replacing on the Verizon and Sprint networks.