April 24, 2012

Google Sells Phones Again

Google Play is not just for digital content. You can now buy unlocked Galaxy Nexus phones for only $399 if you are in the US. "Galaxy Nexus devices purchased on Google Play are unlocked GSM/HSPA+ devices. The unlocked Galaxy Nexus requires GSM compatible service provider for voice calling. In the United States this includes AT&T and T-Mobile," explains Google.

"Galaxy Nexus costs $399 and arrives at your door unlocked, without a carrier commitment or contract. You can use it on the GSM network of your choice, including T-Mobile and AT&T. It also comes pre-installed with the Google Wallet app which lets you easily make purchases and redeem offers with a tap of your phone. Best of all, we'll give you a $10 credit to get you started with your new mobile wallet," mentions Andy Rubin.

This is not Google's first attempt to create an online store for selling Android devices. Back in 2010, Google launched a web store that allowed you to buy a Nexus One and choose your favorite service provider. Google's goal was to add other Android devices and to make it easy to buy phones. Unfortunately, Google's store wasn't successful, people complained about the lack of customer service, Verizon skipped the Nexus One and Google closed the store four months later. "While the global adoption of the Android platform has exceeded our expectations, the web store has not. It's remained a niche channel for early adopters, but it's clear that many customers like a hands-on experience before buying a phone, and they also want a wide range of service plans to chose from," said Andy Rubin at that time.

It's really difficult to sell unlocked phones in the US because they're a lot more expensive than the locked phones, plans cost the same and phones can't be used on two of the most important carriers: Verizon and Sprint. This time, things are a little different: Galaxy Nexus was only available for Verizon customers and its price dropped from $299 to $199. While $399 is not a high price for an unlocked phone launched 5 months ago, you can buy subsidized phones that are more powerful than Galaxy Nexus (for example, HTC One X for $199).

Google's new store is better suited for tablets, since most people don't buy subsidized tablets. As the Wall Street Journal speculated last month, "Google will open its own online store this year, but stocked with tablets instead of phones. The Android tablets would be built by Samsung and ASUS who already offer the well received Galaxy Tab and Transformer lines, but have been unable to make a dent in marketshare comparable to that of Apple or even Amazon."