Google's Nexus One: Marketing flop or fantastic success?: Is Google's heart really in the phone business, or is it in the business of creating business?

No one could exactly hail Google Inc.’s Nexus One a marketing success, so it comes as little surprise to see the search engine giant seeking to bolster its marketing team for the device and its future generation.
In a job listing spotted this week, Google said it was searching for a product marketing manager – of both Android and Nexus One – to be based in its Mountain View, Calif., headquarters.
The listing notes that “the Android space is a big opportunity for Google, and an area of strategic importance. As Product Marketing Manager for Android and Nexus One, you support the Direct-To-Consumer marketing plans and initiatives that will be rolled out in the coming months. You are focused on increasing the number of device sales and increasing awareness of the Nexus One brand.”
Applicants, says Google, should have at least seven years of work experience, with at least three years of experience in mobile-related ventures, with e-commerce and retail experience a plus.
The firm is also looking for a candidate with good understanding of Google’s strategic and competitive position in Android/mobile, and demonstrated analytical success.
Interestingly, the position also states that the chosen candidate would be required to “work closely with global counterpoints in Android marketing to ensure global cohesion, communication, and scalability for local strategy, campaigns, and launches.”
Why interesting? Well, for a start Nexus One has only officially been launched in the U.S. with a direct connection to one operator (T-Mobile USA Inc.), which is hardly what one can call a global effort thus far. (Google does offer a Nexus One compatible with AT&T Mobility’s 3G network, but that device is only available for an unsubsidized price of $529. Verizon Wireless is expected to get its own version of the device later this year.)
Indeed, whereas Motorola Inc.’s Droid running Google’s Android sold more than one million units in its first 74 days, according to market research outfit Flurry’s estimates, the Nexus One only sold 135,000 units in the same period, which sounds somewhat pathetic.
But herein lies the crux of the matter. Those who slam Google for what appears to be a rather flimsy marketing campaign for the Nexus One may be missing the point. Because the underlying assumption for such criticism is that Google actually wants to sell phones. But, maybe Google’s master plan doesn’t lie in the selling of the actual phones at all, but of opening up new business opportunities.
At this year’s Mobile World Congress event Google CEO Eric Schmidt noted that 60,000 Android handsets were shipping every day – a run-rate equivalent to 21.9 million per year.
And according to Gartner, 6.8 million Android handsets were sold in 2009, accounting for a 3.9% share of global smartphone sales – up from .5% in 2008.
Looking at just the U.S. smartphone market, Comscore Inc. reckons Android took a 9% share of all U.S. smartphones in circulation in February 2010 – up from 2.8% in October 2009.
Google is a search engine giant, which makes the bulk of its money from advertising, not from phones. And pushing Android firmly into the smartphone space is a smart move as it ensures that Google will be making much more mobile advertising revenue as the platform gains popularity. After all, Google isn’t going to be making any money out of Nokia Corp. users surfing the net on their Symbian offerings.
It would therefore appear that rather than being in the phone business, Google is setting itself up to be in the business of creating business, for itself.
If this assumption is correct, then what Google has been trying to do is to push the market forward and get it moving along faster, in the Android direction.
This also means that if it’s only really the Android platform Google cares about as a money maker, then the Droid and other Android-powered devices with their millions and millions of sales are already enough.
If that’s the case, then perhaps the Nexus One wasn’t meant to sell a lot of volume at all, instead, it was meant as a wakeup call for the entire industry, to show what is possible, and to set a standard for others to hold up and follow. And in that sense, one could argue that Google’s strategy has worked. Just look at all the copycat efforts out there, including HTC Corp.’s Logo phone and the Desire.
No phone maker out there wants to launch a smartphone worse than the Nexus One, because it has become something of a Google standard for partners to follow. A bellwether. And examined in that way, while the Nexus One might be in dire need of some marketing help, it’s not a flop by any measure.
Google has proved shrewd in terms of pricing the device too. Whilst almost mind-numbingly expensive in its unsubsidized form, the Nexus has proved to phone makers that if you build the right product people will pay for it, an important lesson in today’s battered economy. A lesson previously shown by the original launch of Apple Inc.’s iPhone at its $400 and $600 price points.)
If we were to offer a comparable analogy, we might use that of Rolls Royce manufacturing aircraft engines. You’d better believe that if Rolls Royce could afford to, it would build its own plane that would blast any competitors out of the sky, but why bother when the firm can simply build a fantastic engine and then scale back as engine sales took off? Astute indeed.
So, if Google isn’t all that bothered about selling millions of phones, why even bother to hire a better marketing manager? Well, to keep the Android momentum going for one thing, and to keep pushing the industry and Google’s handset partners to go one better than Apple.
If Google’s Android platform is to win, there can be no resting on the Nexus One’s laurels, and the phone perfecting process can’t just stop in its tracks.
In order to grow Android’s market share, Google has to ensure it is setting the right tone, the right standard for its better selling partners to mimic, and that is why it will continue to raise that mobile bar higher and higher, pushing the industry as a whole to step it up.
That is a truly big job, whoever eventually takes it on.