So the Nexus One is doomed?
Shares of Google
"Nexus One may turn a few heads initially, but it's unlikely to revolutionize the market or live up to the early hype," my Foolish colleague Rick Munarriz wrote Wednesday.
He goes on to write that the smartphone market, dominated by Nokia
Really? Here's a look at the worldwide market for mobile handsets in the third quarter:
Company |
Handsets Sold* |
---|---|
Nokia |
113,466.2 |
Samsung |
60,627.7 |
LG |
31,904.4 |
Motorola |
13,912.8 |
Sony Ericsson |
13,409.5 |
Others |
75,551.7 |
TOTAL |
308,869.3 |
Source: Gartner, Inc.
*In thousands of units.
And here's a look at the smartphone market during the same period:
Company |
Smartphones Sold* |
---|---|
Nokia |
16,156.4 |
Research In Motion |
8,522.7 |
Apple |
7,040.4 |
HTC |
2,659.5 |
Samsung |
1,320.6 |
Others |
5,368.0 |
TOTAL |
41,067.6 |
Source: Gartner, Inc.
*In thousands of units.
Do the math; smartphones accounted for just 13.3% of the overall market in the third quarter. This industry is no better than a toddler, Rick.
My view of the (ahem) "gPhone" mirrors that of another of my colleagues, Anders Bylund, who argues that Nexus One is a reflection of a broader strategy:
Google expects to launch several Android models in the just-born online Google phone store, but none of them will devour the mobile market, nor kill any specific competitor. What Google is doing is simplifying the consumer's phone-buying process -- choose a phone, then pick a network.
A better subsidy
Another possibility is that Google will further circumvent carriers such as Verizon
Call it the AdMob mentality at work. Google is in the process of acquiring mobile advertising network AdMob for $750 million.
Plus, Google has more than enough cash to make this plan work, and it could be structured to aid partners. Imagine if The Big G agreed to cap subsidies at a certain level, ensuring that its own devices would never undercut offers from Motorola
Imagine also if Google's storefront that sold ad-supported subsidized phones never gave preference to a Google device, but instead allowed you to shop by feature, network, and price. That Google would be your advocate as a mobile consumer, one you might be more willing to trust to deliver you mobile ads.
Nexus One is doomed? No, I don't think so. This is a toddler of a market that only recently put down the baby rattle. Google has more than enough time to prove itself a responsible parent.