Google is shutting down their Nexus One online store
It is not easy to change how people buy stuff. In a previous post, I described two reasons for why Google launched a Google Phone:
1. Secure overall user experience quality (solve a coordination problem by vertical integration)
2. Change how mobile phones are sold in the US (first choose phone, then choose carrier and subscription)
It seems like they didn’t succeed with reason #2. Google is now changing the distribution model for Nexus One, and will use traditional channels. Mobile operator’s can do more than providing wireless access to the Internet. Google’s blog post emphasize that many customers like a hands-on experience before buying a phone. I have to say that I’m more likely to get a Nexus One after trying it.
John Paczkowski in Digital Daily commented:
So was Google’s strategy for the Nexus One doomed from the beginning? Probably. Customer behavior is a tough enough thing to change. Disincentives like Google’s questionable customer support and a pair of early termination fees on a device Google was asking us to buy without even touching it certainly didn’t help.
I think that Google also has considered their strategic signals towards manufacturers of Android devices. Google’s vertical integration to create a Google phone is not unproblematic in this strategic interaction. They are changing the soon to be closed Nexus One store into a showcase for Android devices.
From retail to viewing. Once we have increased the availability of Nexus One devices in stores, we’ll stop selling handsets via the web store, and will instead use it as an online store window to showcase a variety of Android phones available globally.
This seems like a sound decision.
