Tuesday, May 11, 2010

Sprint Rejects Nexus One - What Next For Google?

Google Nexus One is a serious contender in the smartphone market and arguably a challenger to the iPhone with its Android operating system. Nexus One offers free satnav capabilities, multitouch web-browsing and comprehensive integration of web and email with Google mail. 

So why has Sprint decided to drop its plans for Nexus One?  
Last month Verizon also announced it would not carry this phone.  The simple answer is that Google has challenged the traditional carrier/wireless store distribution model by selling the Nexus One unlocked, direct to consumers.  So the marketing war has started.  

The Android operating system has become very popular with consumers. All Google needs to do to break the wireless carriers stranglehold is simple: drop the price from the $500  plus price tag to around $250, unlocked.  If a company is serious about breaking a market or a dominant business model, profits have to be a secondary objective, market penetration is all that matters to establish a standard or a brand.  Google has clearly invested heavily in developing both the Nexus One and the Android OS.  If carriers are not interested in a deal unless they have exclusivity, then it's time for Google to carry through with what it's started by dropping the price and seeking retail distribution outlets such as BestBuy.  Consumers need to see, feel and play with the phone before purchase and no one is interested in $500 for a phone when you can buy an iPad for $499.  

While most opinions out there are calling for Google to drop Nexus One, I think this is a major opportunity for Google.  Technology has dropped significantly in price, so why haven't the phone devices?  It's time for the old business model to change and for consumers to be free of being tied to two year contracts!  

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