Why Google Phone Sales Will Still Lag After Coming To AT&T, Rogers

Image via CrunchBase

Tricia Duryee
@triciad
Mar 16, 2010 3:33 PM ET

Google (NSDQ: GOOG) says the Nexus One, which is the first device it is selling directly to consumers, is now available with frequencies used by AT&T (NYSE: T) in the U.S. and Rogers Wireless in Canada, in addition to the one that’s been available for T-Mobile USA.

The phone will be sold at www.google.com/phone and will cost $529, a hefty price tag considering the $179 subsidized version available with a T-Mobile contract. While common sense may lead you to believe that sales will increase with the availability on other carriers, the uptake of the well-received device will likely continue to be low. Rather than teaming up with a carrier to get sales and marketing support—and a subsidy—Google has opted to sell the phones directly to consumers. Without that backing, it’s easy to see that the device will lag behind others. After all, why would a consumer opt to pay $529 for an unlocked Nexus One on the AT&T network when an iPhone costs as little as $99?

In the first 74 days of the device being on sale, Google sold roughly 135,000 devices, compared to 1 million first generation iPhones and 1.05 million Droids. While those comparisons are not accurate because those phones were sold with carrier support, you can see how difficult it is—even for Google—to break the traditional way business is done in the wireless industry. Other companies, such as Nokia (NYSE: NOK), have tried selling unlocked devices in the U.S. in the past with little to no success.

Those sales figures were reported today by Flurry, which says it can make reliable estimates about total handset sales because applications embedded with Flurry’s analytics tools have been downloaded to more than 80 percent of all iPhone and Android devices.

As I’ve written before, consumers are only likely to change their behavior if they perceive a better value somewhere else, and right now it’s not clear what you get when you buy a phone directly from Google. However, this is not a sign that Google is failing. Last month, Google’s CEO Eric Schmidt said it was shipping 60,000 Android devices a day—which could work out to be 22 million this year alone.