The news from the Sprint Nextel (NYSE: S ) camp comes just days after Verizon Wireless -- controlled by Verizon (NYSE: VZ ) and Vodafone (NYSE: VOD ) -- also bowed out as an originally announced distributor.
This leaves Deutsche Telekom's (NYSE: DT ) T-Mobile as Nexus One's loudest cheerleader, which isn't good news for the search giant's first foray into a proprietary smartphone.
The good news for Google is that plenty of existing phones are built around its Android mobile operating system. Marketing research firm NPD Group even declared that Android-powered smartphones outsold Apple's (Nasdaq: AAPL ) trendsetting iPhone during the first three months of the year.
Google knew the risks when it decided to make Android an open platform. It knew that Nexus One maker HTC would release the G1 model first, followed by a slew of other models. It knew that Motorola (NYSE: MOT ) would also beat it to the punch with its Android-powered Droid. Google's decision to try to throw its net as wide as possible in the name of market penetration may also explain why carriers aren't necessarily compelled to push Google's first self-marketed smartphone.
This may actually be good news for Google. Back in January, I figured that Google might go from friend to frenemy among handset makers if Nexus One was a big success.
"This could snowball into bigger problems for Nexus One," I wrote at the time, fearing that other hardware makers would abandon Android if it became too synonymous with Google's homegrown efforts. "After all, if Android's penetration is low, developers won't throw their weight behind the platform the way they have with Apple's App Store."
Thankfully, that scenario hasn't come to pass. Android is popular in several phones that aren't Nexus One, and the platform's success will attract many of the developers now building up Apple's most popular downloads.
Even if Google doesn't realize it yet, the Palm-esque fizzle of Nexus One may be the best thing that could happen to its promising Android platform.
Does Nexus One still have a shot? Share your thoughts in the comment box below.