There’s been some interesting articles from the major tech outlets regarding sales of the Nexus One. In one article last week, mobile analytic provider Flurry released a report that estimates the first week Nexus One sales at 20,000. That number pales in comparison to the first week iPhone sales (1.6M) and Droid sales (250K).
In the grand scheme of mobile, the Nexus One sales numbers don’t matter.
The Nexus One is not about the phone and its sales, it’s about ushering in a new era in mobile. An era where the carriers like Verizon and AT&T do not have control over the handsets and the services that run on them. An era where handset manufacturers are free to innovate without carrier restrictions and can sell directly to consumers. An era where consumers can buy unlocked equipment from manufacturers and chose their carrier based upon quality of service and network without the confines of a long-term contract.
T-mobile started the process by launching its Even More Plus plans last October – a wide range of plans with no service contract. As a European-based company, they are familiar with and used to this model. I am sure Google worked with them and previewed their Nexus One plans, and T-mobile was more than happy to oblige as a way to differentiate itself and move out of fourth place amongst carriers in the US.
Now, with the Nexus One introduction, Google has introduced a new sales model for mobile phones. Sure there are bugs to work out, but the important piece is that Google is willing to experiment with a new sales model. A sales model where you can buy a phone, unlocked, and then decide which carrier has the best service. And the best part – no long-term contract.
A recent analysis by Billshrink showed that the Nexus One is a cheaper alternative without a contract, even at the $529 unlocked price, than competing handsets on Verizon and AT&T. In fact, it’s over $1,000 cheaper than an iPhone and the Droid over the length of the contract.
The final step in the transition to a new era is the introduction of the next generation of mobile technology – LTE. LTE will unify mobile technology across all the carriers – no need to worry about whether a carrier has a CDMA (Verizon and Sprint) or GSM network (AT&T and T-mobile). Once that transition happens over the next one to two years, consumers will buy unlocked phones and then pick a carrier based on their service and rate plan. True competition for consmers will finally exist.
Of course, for those outside the US, this era has always existed, and it shows. When you travel overseas, the handsets and services are way beyond what is available in the US. Why? Consumers have more choice. Carriers and handset manufacturers compete for consumers and have to constantly innovate – there aren’t any contracts locking consumers into poor choices. It’s about time this model exists in the US.
In the end, the Nexus One’s success will not be measured on its sales numbers, but its ability to bring a new era in mobile to the US.