Why Google Shelved the Nexus One on Verizon

By Clint Boulton  |  Posted 2010-04-27 Print this article Print

If you're a true Google watcher, by now you've seen the news that Google nixed its agreement to put its Nexus One smartphone on Verizon Wireless' network of 90 million-plus users.

This clearly deals a blow to Google's hopes for expanding the device, which it sells solely through its Webstore. So now the only major question to be entertained is: why? Why did Google (or Verizon, if you're of that school of thought) do this?

Journalists, bloggers and pundits are hurling around different reasons. Before I get into them, my gut was that the Nexus One, despite Google's claims to the contrary, just didn't sell well enough.

Then here comes this sexy HTC Incredible, boasting the same size and quality of display, the same operating system version, Android 2.1, and the same 1 GHz processor.

In limited testing, I've come to find the Incredible is just a better Nexus One, boasting a better camera (8 megapixels to 5 MP on the Nexus One), and a richer user interface with the seven palette HTC Sense experience.

So it makes no sense for Verizon to support the Nexus One when the Incredible will run right over it. It would cost more money for both Verizon and Google to support it, even though Google exclusively sells it.

Someone at Google or Verizon made the decision, but which side did so is unclear. Google positioned this hard blow to the Nexus One in a soft light, noting:

We won't be selling a Nexus One with Verizon, and this is a reflection of the amazing innovation happening across the open Android ecosystem. Verizon Wireless customers who want an Android phone with the power of the Nexus One can get the Droid Incredible by HTC.

Indeed, the Nexus One Website, which used to advertise the gadget going to Verizon in the spring, now points users toward the Incredible, which goes on sale April 29:

Nexus One Incredible.png

Here is what others are saying about it:

Wall Street Journal: "After lackluster sales, it was Google that decided to pull the plug on a CDMA version of the Nexus One that would have worked on Verizon's network, according to a person familiar with the matter."

BGC Partners analyst Colin Gillis, via Bloomberg: "The breakdown of the deal signals Verizon may view Google as a competitor rather than a partner when it comes to Nexus One sales, said Gillis."

I'm not sure I buy that theory. Here's one I do buy:

TechCrunch: "Others will see this as Verizon fearing Google entering its own space. If that's the case, why agree to partner with Google in the first place? And why be more afraid now when sales through Google itself don't look that strong? No, the real reason Verizon is dumping the Nexus One is much easier to understand: There's simply a better Android phone coming shortly."

However, TechCrunch also assumes this was Verizon's move and that's where I'm having trouble.

Why have Google announce this move with sugarcoating we can all see though instead of saying flat-out that it won't support the Nexus One? Presumably to save face and to keep the Android on Verizon innovation and marketing shop humming.

Perhaps. Verizon is the best network on which Google can move the Android needle forward versus the iPhone, so Verizon wears the pants in this relationship. If it doesn't want Google releasing phones that compete with it, then Google won't or can't.

Of course, it could just be that this was just a practical technological roadmap decision and not a business grudgematch pitting Verizon's heft first the fledgling Google Webstore.

In other words, the Incredible just cannibalized the Nexus One on Verizon.

How do you see it?

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