Google Nexus One

The success of the Google Nexus One has been up for debate since the phone first launched in January. Google adopted a non-traditional way of selling the phone, opting to solely sell it online at Google.com/phone and not making it available in any brick and mortar store, even as a dummy device for consumers to try. And so stories arose from analysts who said the Nexus One wasn't selling as many units as anticipated. While we still have no official numbers, Google did give the following statement during this afternoon's Q1 earnings call:

"It is a profitable business for us. ... We are driving the business to be a profitable business from the get-go."

Added VP of engineering Jeff Huber during the Q&A session:

"We're not disclosing the specific number ... We are very happy with the device uptake and the kind of impact that it's had across the industry."

Huber refused to answer if Google had any plans to change its sales model for the Nexus One.

Take all that however you want. And we may never know just how profitable the Nexus One is, or what Google's own expectations were.

 

Reader comments

Nexus One 'is a profitable business,' Google says

11 Comments

We have to remember
profitable can mean more than sales income.

I can't see how they made much on the hardware sales. The buzz the damn thing generated was priceless compared to the cost of actually doing it.

You know if this device was as successful as they want to believe, they would have given sales numbers. The fact that they didn't release specifics is enough for me to know that it wasn't anything earth shattering.

The sales might be successful in their eyes but the fact that they won't release the numbers is because the only basis for comparison makes the N1 appear to be a failure. It isn't, because of the limited distribution obviously it was going to sell way less than a phone available in stores..but the fact that there was no attempt to truly compete is disheartening to me. Android is good enough to take the world by storm, I wish Google would ease up on the online only business model and do something to get this product more available. I wanted an N1 but I refuse to buy any electronics without trying one.

Sometimes people forget that something around 99% of the billions of dollars of revenue that Google pulls in are from adds ALONE. Meaning all this free stuff they make or other types of markets they may want to pursue is damn near risk free. They could come out with a $100 million product with a $200 million campaign for that product, bomb as bad as lets say Nintendo's Virtual Boy and still come out on top.

This is the beauty of Google, they have so much capital with minimal risk, they may as well be playing with monopoly money.

From what I know, the guys at Google are very smart. I am pretty sure they know what they are doing

Though I have to admit, I have no idea how the Nexus is such a big success. If they released it in the entire world with a good marketing campaign, everybody would know what a 'google' phone is. They are GOOGLE for the love of god! Everybody knows what Google is.

When the iPhone got released, one of the biggest things the device had to it's advantage was the name Apple behind it. It was more that Apple made a phone, rather than what the device was. Lets be honest, in the beginning the iPhone had nothing. That Appstore made the device huge. But the first iPhone still sold well, because of that Apple name.

Now Google is a much bigger name imo. The Nexus One is a good device in almost every aspect. They could have done what they want to do in the future. But I think they are very carefull and want to be even more sure about how they are going to take over the smartphone industrie.

Ah well, let those smart people work how they think is best :)

you guys are using the term "profitable" in a very limited way. Profit means you are not actually loosing money on it and they aren't. As long as it is in the black then it's profitable.

Pretty sure Google didn't want to promote their own phone too much cuz it would piss off HTC, Motorola and all the other companies they are hoping to make their own Android phone. Why compete against your friends?

It's pretty clear Google wanted to build an Android device to showcase to the world what the very best of Android was capable of. I have no doubt N1 is profitable at this point, but the buzz it generated and the fact that it was truly one of the first phones to actually trump the iPhone in more reviews in all aspects was to Google, priceless.

You can't deem something a failure without looking at the companies expectations first.

I think they would sell many more if they stopped their practice of having to order it directly from them. I still don't get the logic in that? People want to see and try a phone before they buy.

Nexus 1 is profitable because of the LACK of certain costs.

Things Google is NOT paying for with each Nexus 1.

A fee to thew carers to put the phone in the stores.
Store rent.
Sales employees.
NOT MUCH money spent on marketing.

Also, they weren't the ones who were responsible for developing the hardware.

Well said; I just signed up on the site so I'd be able to post something similar. Since you beat me to it, vote up instead. :)