Google to Shutter Its Phone Store. Good!

By  |  Friday, May 14, 2010 at 11:06 am

Well that was quick. Google, which got into the business of selling phones online a little over four months ago, is getting out of it. In an Official Google Blog post, Android honcho Andy Rubin explains that the company is pleased with Android’s overall progress-as it should be–but that the Web store has been a disappointment. It turns out that people like to see phones in person before they buy them, and that they want a bunch of service plans to choose from. (Shocking, huh?)

When Google announced its Web store, it called it “a new approach to buying a mobile phone.” It’s saying that it will revert to an old approach: selling them through brick-and-mortar retail stores. (It’s not entirely clear what sort of stores these will be, but in Europe you can already buy a Nexus One from wireless carrier Vodafone.)

Google’s no-frills, Web-only strategy for the Nexus One sounded iffy from the start, and in the wake of rumors of feeble sales and canceled plans for additional carriers, the only surprising thing about the company’s change of plans is how swiftly they came. The turnabout is probably a tad embarrassing for Google, but it’s also a logical move given the store’s failure to make much of a dent in the phone-selling universe. Google’s a much more impressive company when it brings radical inventiveness to a problem of long standing than when it does things for no clear reason other than that it can.

I’m not particularly saddened by the demise of the store in its current form, since the only clear benefit it offered over buying a phone directly from a retailer was the option–not very popular in the U.S.–of opting for an unsubsidized, unlocked model. It’s sad, though, that Google failed to really shake things up with the unconventional business models that some of us fantasized about. A Googlephone sold at a phone store may still be an excellent phone–I imagine Google may announce the Nexus One’s successor as soon as next week at its I|O developer conference–but it’s going to be sold the same old way as any other handset.

 
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7 Comments For This Post

  1. A. Shareholder Says:
    May 14th, 2010 at 12:20 pm

    Good? Couldn’t agree more! This has been a fountain of bad news from the start and as a shareholder I’m keen to see the store aspect of it go.

    Hope they look after all those that bought though!

  2. Backlin Says:
    May 14th, 2010 at 12:39 pm

    Who would have thought people wanted to see and use sample phones before they bought their’s?

  3. sfmitch Says:
    May 14th, 2010 at 1:04 pm

    Google is in a cool position that they don’t seem to look bad when something they try doesn’t work out. In fact, that seems to be part of their DNA. They try a lot of things and see what sticks. People don’t seem to hold their (many) failures against them.

    I think a fundamental problem with the strategy was the lack of saving money involved. Most people would prefer to buy in person, if the price was the same. A huge reason ordering online is to save money.

    Apple has it right – you can buy our stuff anywhere you want and you will pay the same price.

  4. Mike Cerm Says:
    May 14th, 2010 at 2:22 pm

    The problem here (in the US) is that carriers, with the exception of T-Mo, don’t give you discounts if you buy unsubsidized. If Verizon, Sprint, and AT&T are going to charge you the same no matter what, and most people don’t want to change phone companies all the time anyway, you might as well sign the contract and take the subsidized phone.

    Now, if you could reduce your monthly bill substantially by paying full-freight on phones up-front, AND not have to worry about contracts, I think people would go for that. Unfortunately, that’s not what the carriers want, and they’ve got the public over a barrel.

  5. Hamranhansenhansen Says:
    May 15th, 2010 at 1:26 am

    > Google is in a cool position that they don’t seem to look
    > bad when something they try doesn’t work out. In

    I couldn’t disagree more. They used to look invulnerable, and they used to have a market cap bigger than Apple. Now they look like nerds who are out of their league, like Microsoft always does. Google’s mobile division is harming their overall brand in my opinion. Not to mention they gave up exclusive ads and search on iPhone OS, which even now makes more money for them than Android. Now Apple is doing ads and with Siri, possibly a next-generation search.

    Compare Google’s “fiber to the home” initiatives and Android. They are like giants in backend, but microscopic with consumers.

    > The problem here (in the US) is that carriers, with
    > the exception of T-Mo, don’t give you discounts if
    > you buy unsubsidized.

    I think it’s more that all 4 US carriers run different phone hardware. If you had 6 standard GSM networks competing for your month-to-month business like in some countries, there would be an advantage to buying an unlocked phone for $500. In the US, you need a new phone to switch carriers, so you might as well buy subsidized and just break the contract if you need to switch.

  6. Bigmouth Says:
    May 15th, 2010 at 7:49 am

    Nonsense, Mike. I pay half the price for ATT data on the Nexus One than I did with iPhone 3g.

  7. Strongfist Says:
    May 17th, 2010 at 2:14 am

    I think googles approach to this was “inventive” but lack a good incentive. getyourgadgetsgoing.com offers a well devloped out look on why this has failed

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