Google Inc. (GOOG) sold about 80,000 Nexus One mobile phones in its first month on the market, roughly one-eighth the number of units the original Apple Inc. (AAPL) iPhone sold in its debut month, according to analytics group Flurry Inc. The slow sales figures highlight the challenges Google faces as it attempts to establish a new model for pricing, marketing and distributing mobile phones. The Mountain View, Calif.-based Internet giant broke with conventional sales models when it launched its smartphone, saying it would sell the unit directly to consumers without a cell phone company contract.
Nexus One sales appear to have been steady week over week during its first month, according to Flurry's analysis. The company made its estimates by measuring mobile applications usage and then extrapolating overall ownership.
By contrast, Apple's iPhone got off to a very strong start when it debuted in mid-2007, selling an estimated 600,000 units in its first month, according to Flurry. Apple announced it sold 1 million iPhones during the first 76 days they were on sale.
Meanwhile, Motorola Inc.'s (MOT) Droid, which, like Nexus One, is built with Google's Android mobile software, sold 525,000 in its first month after launching last November, according to Flurry.
Google didn't immediately respond to phone calls seeking comment.
After months of speculation, Google took the wraps off of its so-called "superphone," built by Taiwan's HTC Corp. (HTCXF, 2498.TW), on Jan. 5. The company also announced it would sell the device directly to consumers through a Web store.
The Internet giant hopes it can convince other operators to offer wireless plans through its Web store, enabling Google to establish a cheaper and more efficient model for the way mobile phones are sold.
But observers were struck by the price of the Nexus One, which sells for $529 without wireless service. Customers can also buy the phone for $179 if they commit to a two-year contract with Deutsche Telekom AG's (DT) T-Mobile USA, currently the only carrier that provides a Nexus One wireless plan.
Observers have also been skeptical about Google's decision to spend virtually nothing advertising the Nexus. Google briefly pitched the phone on its home page, but the link quickly disappeared. Apple and carrier AT&T (T), in contrast, have spent heavily to promote the iPhone on TV, radio and the Internet.
Perhaps more importantly, the early hype around the Nexus was quickly overshadowed by a series of reports about connectivity snafus, customer service shortcomings and eye-opening "recovery" fees. Those concerns might have prompted some potential buyers to wait until Google and its partners sort out any issues.
Google executives have defended their decision, noting the Nexus One is a first device and part of the company's long-term mobile strategy.
"What the Nexus One is really about is a new way of buying a phone," said Chief Executive Eric Schmidt in a recent conference call. "The Nexus One is simply the first of a series of examples where you can essentially purchase a phone online from one or multiple manufacturers and have it just work. We think that's a natural evolution of a particular model."
Among other factors that likely have hampered sales of the Nexus One is Google's decision to launch the device right after the critical holiday shopping season, said Peter Farago, vice president of marketing at Flurry.