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The Nexus One, Google’s first self-branded smartphone, is a huge success – when considered from certain perspectives, according to analyst Jack Gold, founder of J. Gold Associates.
In an April 15 report, Gold argues that Google was never out to beat Apple’s iPhone or out-sell smartphone makers such as HTC – which actually made the Nexus One – BlackBerry-maker Research In Motion or Motorola. For Google, writes Gold, it was never about being a competitive phone maker.
“It was about Google getting a significant number of devices out there to form a big -reference platform’ testing/piloting environment where they could model, test and tune their ecosystem based on the real life use of the early adopters who would buy Nexus One,” he wrote. “It’s about Google being able to hone [its] products and strategy for mass deployments later on.”
Analytics firm Flurry has reported that it took Apple 74 days to sell its first 1 million iPhones. In the same number of days after launch, Motorola sold 1.05 million of its Google Android-running Droid smartphones, but Google moved only 135,000 Nexus One handsets.
Gold estimates Google’s current sales numbers for the Nexus One to be between 200,000 and 300,000 handsets.
Regardless of exact sales, says Gold, the figure represents an enormous number of test subjects for Google. “Google not only gets to test and tune the device OS, but also gets to tune [its] app store and delivery ecosystem before it goes live to tens of million of users,” wrote Gold. “Issues with the app store now would be fairly minor.”
And profits? Also not an issue, said Gold, writing that “Google doesn’t have to make money on the device nor sell lots of them directly to ultimately make a huge profit in the smartphone market.”
Google proved this for itself April 15, reporting revenues of $6.77 billion and net income of $1.96 billion during its first quarter of 2010. It additionally reported that its Android mobile operating system – which is said to be the fastest-growing mobile OS in the United States – is now on 34 devices available from 12 OEMs, and that its Android Market app store is now stocked with 38,000 offerings.
Finally, Gold added that the type of early adopter who’d purchase a Nexus One isn’t likely to stay quiet about any issues he or she may come across.
“These are the kinds of debuggers you want working with your device in the early stages and giving you lots of feedback,” wrote Gold. “Google is a service provider that is trying to give itself an advantage in the market by making sure platforms are open, especially to their key revenue-generating offerings (e.g., search, ad serving, location services, You Tube, etc.). Evaluated in that light, I’d say Google’s first endeavor into the world of phones with Nexus One was a big success.”