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How Google's Nexus One Can Rebound


More carriers could boost lagging sales.

Don't rule out Google's (GOOG) Nexus One quite yet.

After the mobile market researcher Flurry estimated this week that the smartphone's sales will be abysmal, many declared the Nexus One dead on arrival. But the device could be poised for a comeback as compatibility on the top four cell providers will soon be available. Along with the peripheral success of the Android OS, its app market, and top-selling phone, the Nexus One can see a slow-burn success after missing out on an early victory.

On Tuesday, Flurry released the sales numbers of the Motorola (MOT) Droid and the Nexus One. Using Apple's (AAPL) report that one million units of the original iPhones were sold in 74 days, Flurry compared the sales records of the two Android phones within the very same time line. The result: Two surprising figures.

First, the explosive debut of the Motorola Droid managed to outperform Apple's flagship smartphone. While Apple enjoyed a million sales in 74 days, Motorola squeaked by Jobs and company with 1.05 million. That's right. A high profile unveiling, a massive media push, and household name recognition couldn't match a masculine ad campaign, positive hands-on reviews, and thousands of "This is the Droid you're looking for" blog headlines. So in at least one respect, we've found our iPhone Killer.

The other statistic, however, isn't so laudable. In a little over two months, the Nexus One sold a mere 135,000 units. Granted, that was without a serious ad push or hands-on impressions by customers in brick-and-mortar retailers. Nevertheless, the number is disconcerting.

Google maintains that releasing a single bestselling device wasn't its primary goal, but rather to add a topnotch smartphone to its growing Android line. Speaking with Engadget, a Google spokesperson addressed the sales with the usual corporate optimism, but also provided some encouraging figures:

We're pleased with our sales volumes and with how well the Nexus One has been received by our customers. The Nexus One is one of a fast growing number of Android handsets which have been brought to market through the open Android ecosystem. Our partners are shipping more than 60,000 Android handsets each day compared with 30,000 just three months ago.

The Android Market has enjoyed similar growth. With 30,000 available apps, the Android Market has more than doubled its size over the last four months. App purchases, too, have seen a huge uptick -- more than tripling in the same time period. In a recent ad, AT&T (T) railed against Android for its lack of app variety. Seems as if the spot might be a tad disingenuous.

And speaking of AT&T, the carrier of Nexus One's chief competitor was roped into the Android fold this week when Google equipped the device to work on AT&T's 3G network -- as well as Canada's Rogers Wireless (RCI) -- without any contracts or carrier locks. AT&T isn't subsidizing the smartphone -- currently, only T-Mobile (DT) is in the US. But Nexus One's number of official providers will soon increase by two. Verizon (VZ) is expected to carry the device this spring and Sprint (S) recently jumped on board as well with an unspecified start date.

This means, along with multitasking, the Nexus One will have another advantage over the iPhone: multiple providers. While rumors consistently circulate of a Verizon iPhone, no concrete evidence has emerged as of yet. Until Apple approaches another provider, iPhone users in New York will have to make do with a 30% drop rate.

But even more beneficial to curious buyers, Google hinted at releasing the Nexus One to carrier stores, allowing customers to have a hands-on experience before making a purchase. After all, not many people are willing to plunk down $179 and opt into a two-year contract without first giving the phone a test run.

Coupled with the exponential growth of other Android devices and the number of apps in the market, Google's Nexus One isn't out for the count quite yet. With greater option and availability -- not to mention a far better ad campaign, possibly -- it might soon get its second wind.
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