Is it Game over for Google’s Nexus one / Direct to consumer strategy and if so, what can we learn from it?

nexus one open strategy.jpg

As media reports would suggest, it could be game over for Google’s direct to consumer Nexus One strategy

I was watching Nexus One very carefully especially it’s direct to consumer implications considering my emphasis on the Open Gardens philosophy. By all accounts, the reception has been luke warm and as the fierce wireless article says, when it is available, Nexus one is not in its original incarnation (through a direct to consumer web site), rather it is sold and distributed through Operators – making it similar to any other phone

So .. What does it mean for the industry as a whole?

Nexus One put Google directly in competition (and indeed conflict) with other handset vendors who adopted Android. So, in that context, I see Nexus One as an experiment and in Google showing what is potentially possible. This is similar to Google strategy of acquiring spectrum Google: Spectrum bid goal was openness, not winning.

These goals are commendable but also commercial in keeping up with the Google business model of advertising(more people use more content and more that content is linked- annotated , the better the advertising model works as long as Google can capture meta data for that content). That philosophy applies to spectrum as it applies to phones .. Others benefit (and some lose) and the customer gets services which they could never dream of before(example Google maps and Google street view)

Whatever you can say about that vision, it certainly works .. And it customers like it ..

This last bit ‘customers like it’ probably explains the Nexus One status ..

In other words, I see it as an experiment which customers(as of today) did not get (and don’t like as such) since they had nothing ‘special’ to look forward to

Remember that the Web players like Google , Facebook, Twitter and Apple are nothing without their customer fan base(a lesson telcos learnt only too late after the proverbial horse had well and truly bolted from the stable)

There are many factors already discussed such as ‘support’ by email only for Nexus one, iPhone comparison, not understanding the consumer device market and the experimentation angle ..

However, I would like to add two things to this:

a) Apple succeeded to some extent by the direct billing (through iTunes) which is a sort of direct to consumer strategy. That worked because they had the customer on their side by providing a truly superior product in the iPhone. To get concessions from Operators, we need a truly superior product – which Nexus One was not and nor were the many offerings from Nokia(which explains Nokia’s current soul searching).

In other words, the customer is the main driver. If you want to get Operators to change their strategies, get the customer on your side first.. That did not happen with Nexus One.

b) The second point is more subtle. There needs to be ONE main factor for the switch. It’s hard to convince customers about MANY benefits. One BIG benefit which MATTERS for customers will do. Most of us had hotmail accounts. Many of us(including me) switched to gmail in a big way. Why? It was more than ‘Google’. For me, gmail has one BIG feature which literally gave me something very valuable .. TIME .. And that’s the SPAM filter. Nothing else comes even close to it. That alone was enough to justify the move.

So, to conclude, I see Nexus one as an experiment .. But a valuable one in Openness where we can all learn the value of serving the customer.

Update

I just read this great blog from Irving Wladawsky-Berger Customer centric capitalism. I have long followed Irving’s thinking and while not directly related to this post, it does demonstrate the significance of value of putting the customer at the centre of the value chain

Comments

  1. Sena Gbeckor-Kove says:

    I son’t think that Google was seiously trying to sell phones with the Nexus One.
    from my point of view it looked like the, “The phone of Damocles”. A reminder, to operators and manufacturers alike that; if they don’t keep their handsets and os version up to date, or relatively free of interference. Google is perfectly capable of bringing a (then) state of the art device to market.
    Whether or not they are geared up to support and distribute such a device is another story. They do have a lot of cash though and as ssuch, they’re a competitor I wouldn’t want.

  2. Ajit Jaokar says:

    thanks for your comments as usual Sena! kind rgds Ajit

  3. Elle says:

    I always enjoy reading intelligent articles by an author who is definitely knowledgeable on their chosen subject. I’ll be following this thread with much interest. Keep up the great work, till next time