Tough calls ahead for Google's Nexus One plans

Google says it wants to change the way phones are sold with its Nexus One and Web store. To make that work, it needs to do a lot more in areas it rarely touches.

Google isn't marching into consumer electronics; it's tentatively dipping its toes.

For Google, the Nexus One is more than just a phone. CNET

When word of the Nexus One smartphone broke , the consensus was that Google was about to challenge Apple for the high end of the mobile phone market. One month after its launch, it's clear that an awful lot will have to change before Google can truly be considered a viable competitor.

It's not that there's anything lacking from the Nexus One. It's easily the best Android phone produced to date, and CNET editors recently decided it outranked the iPhone 3GS, Apple's best iPhone to date.

But making a great phone is only part of the puzzle. Google has given itself quite a task: It's attempting to overthrow the established multibillion-dollar mobile phone business model. In a presentation in early January, Google rolled out the Nexus One and a Web store where it is selling the phone directly to the consumer, in the hopes that one day it can create an open market for phones and carriers.

Google's Andy Rubin cautioned that day that revolutions take time, and that Google had to enter the game itself before it could start changing the rules. It's hard to tell whether Nexus One customers are opting for the unsubsidized version of the phone or the T-Mobile two-year contract version, as Google declined to release sales data on the Nexus One this week. So it's not clear yet whether consumers are interested in joining Google at the barricades. But if Google really wants to make this experiment work, it's going to have to do a much better job explaining to people why its approach is better.

For every mobile phone owner seething about two-year contracts and locked phones, there are lots of others who simply want to buy a phone that works from a name they trust while traipsing through the mall on a Saturday afternoon. Those people aren't stupid, and they aren't lemmings, they just don't want to deal with complexity.

Consider the largest problem Google has had to deal with in the first month of the Nexus One: a customer support system overwhelmed by early adopters seeking information about shipping delays and glitches. In a way, it's evidence of demand for the product and Google's business model. But in a more telling way, it's evidence of Google's failure to recognize that its typical "launch early, iterate constantly" strategy doesn't fly when people shell out money: they want what they bought to just work out of the box, and they want answers when it doesn't. And these are the early adopters, the people who are enthusiastic about technology and what Google's presence might mean to the mobile phone market.

Google's success in search has much to do with the fact that the company focused on making the entire experience as simple and as user-friendly as possible. For some reason, it forgot those lessons when it introduced its first consumer product that actually costs money.

To Google's credit, it is showing that it's willing to make changes when they are needed. The company is planning to hire someone to design a phone support system for the Nexus One that will probably be just as annoying as every other phone support system but will provide the valuable service of giving customers the opportunity to make themselves heard. And if Google can actually find a better way to provide technical support over the phone--a low bar for such an innovative company--it will have a real selling point for its Nexus One experiment.

But that brings up the second issue: is Google willing to sell the Nexus One? I'm not talking about the physical infrastructure required to collect payments and distribute inventory: I'm talking whether or not Google is willing or able to create emotional appeals designed to get people to change the way they buy phones.

Apple's success with the iPhone can be traced to two equally important factors: it created a great product, and made people want to buy it with clever marketing. Google and its partners have figured out the first part, but it's not clear that Google understands how to do the second part.

Are small text ads enough to build awareness of a game-changing sales strategy? Screenshot by Tom Krazit/CNET

Google is trying: it's hard to miss the AdWords ads for the Nexus One if you've used Google in the past month. But while Google itself is testament to the efficacy of search advertising, search advertising alone is not enough to get a new concept like the Nexus One off the ground, not when Apple, Research in Motion, Palm, Samsung, HTC, and even Microsoft are bombarding consumers with advertising for their products. And that's before you even consider the marketing done by wireless carriers.

If Google really wants to change the way phones are sold, it's going to have to convince the public why. It's actually not that difficult a message to craft, but Google has to take that message to the people in a venue that's larger than a small box alongside search results: "You can't position a brand with keywords," said Yahoo CEO Carol Bartz on her company's last earnings call, and while she has a vested interest in making that statement, it happens to be true.

However, this is a real problem for Google, which is still trying to spread Android far and wide with partners such as HTC, Motorola, Verizon, and others who like the way phones are sold at the moment. Google certainly has the resources to create a big marketing campaign, but Android partners for whom phones are their entire business--not an interesting sideline--may not be all that crazy about competing for air time against Nexus One.

And Google does not have much experience with advertising to the general public, if at all. It is involved in marketing programs for Android phones such as the Droid and MyTouch, but selling a concept is more difficult than selling a shiny phone.

Handicapping Google's Nexus One strategy this early is a little unfair. But Google will have to make some tough decisions in 2010: Does it attempt to reach its goal of changing the way phones are sold by aggressively promoting its vision while risking the alienation of its partners? Does it bow to reality and settle for making Android the best it can be in the current system, with the Nexus One and subsequent devices as rare concept cars designed to show off what Android can do, rather than mass-market products?

Google has a chance to do amazing things to the mobile phone market. But the first duty of a revolutionist is to get away with it.

About the author

    Tom Krazit writes about the ever-expanding world of Google, as the most prominent company on the Internet defends its search juggernaut while expanding into nearly anything it thinks possible. He has previously written about Apple, the traditional PC industry, and chip companies. E-mail Tom.

     

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