
Does Nexus One's Poor Numbers Mean a Strategy Change? - dcawrey
http://www.thechromesource.com/does-nexus-ones-poor-numbers-mean-a-strategy-change/
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anigbrowl
I suggest rather that it is the fruit of a strategy change. Every other phone
(that I know of) you typically obtain by walking into a store. Nexus One is
only available online, to the point that they don't have them in T-Mobile
stores to demonstrate to customers. Whether this will change with AT&T I don't
know.

Why? I'm not sure. But it strikes me that it costs a _lot_ of money to launch
a new product such as a cellphone. For a competing model such as the Droid
I've seen many TV ads, billboards, print media adverts, flyers, people in
Verizon employee uniforms on the street, special merchandising displays in the
stores, and so on. I can't guess at the actual marketing spend for this but it
must be considerable - tens of millions wouldn't surprise me.

Companies spend all that money on advertising because it's the quickest way to
drive sales and recoup their development investment within as few quarters as
possible. Now, we know Google is absolutely awash in cash. what if they took
the view that they could easily afford to sit out several quarters, perhaps
over a year, for the device to become popular rather than spending as much on
the marketing as they did on the hardware development? A good many of their
products seem to be released rather than launched, and allowed to gain
momentum slowly, which also gives them plenty of time to refine and improve
the product without committing infrastructure to an avalanche of support
requests that might or might not materialize. This might be why Google has
never engaged in any large-scale layoffs - they don't over-hire to begin with.

When you think about it, sales of 135,000 for a >$500 device based only on a
picture, a spec sheet, and Google's good name, without any traditional
advertising whatsoever, is rather impressive. That's $71 million in revenue
for a company that has never sold any consumer hardware before. True, only a
6th as much as the last iPhone and the Droid over a similar period, but with
minimal launch costs. And remember Apple having to cut the iPhone price by 30%
in 2007 and then send checks to unhappy early adopters? No sign of that so
far, despite the phone's high sticker price.

Disclaimer: I bought a Nexus One last week. AMA.

