Galaxy Nexus: Best Seller or Cult Favorite?

Filed under Editorials by Kenneth Pennington on December 13, 2011 at 8:11 PM

Samsung Galaxy Nexus
As Verizon readies for the United States launch of Google and Samsung’s latest creation— the Galaxy Nexus— analysts are wondering how well this first Android 4.0-toting device will sell. The device has already launched on over a dozen carriers abroad with HSPA+ support, but the largest release will be this month on Verizon’s 4G LTE network. Unlike previous Nexus devices, it appears that Verizon will exclusively carry the Galaxy Nexus. Google’s last device, the Nexus S, released on T-Mobile, Sprint, and AT&T in the States. Will Google’s strategy with the Galaxy Nexus pay off? Let’s take a look at the Nexus experiment’s history and future after the break.

The Nexus Experiment

When Google released the Nexus One in January of 2010, analysts from Barclays Capital predicted the device would sell between five and six million units. On January 5th, Goldman Sachs estimated a more modest 3.5-million unit push.

The phone was no slouch— it was one of the first Android devices to feature Qualcomm’s 1 GHz Snapdragon SoC, and it featured a 3.7-inch AMOLED display with a pure Android experience. But, when it hit carriers in the United States, they were only able to push far less than one million units. Goldman quickly recanted and degraded their estimates by 70%. Barclays similarly cut their estimates and predicted the death of Google’s online sales store for the Nexus.

Analysis firm Flurry counted 135,000 sales in the first seventy four days after launch. Compare that to one million sales for Apple’s first iPhone, and 1.05-million for Motorola’s OG Droid, in the first seventy four days. The Nexus One was a sales failure by any measurement. Although it was a success in other areas, namely encouraging developers with a solidified platform, the first Nexus was an interesting failure.

Why did the Nexus One fail?

So, why did Google fail to push the amount of units desired? Well, analysts blame a few factors: T-Mobile, half-hearted marketing efforts, and a lack of support from El Goog.

T-Mobile launched the Nexus One exclusively for a number of months before it was made available on another carrier— AT&T— unlocked without subsidization. Given T-Mobile’s smaller market share in the American carrier field, the Nexus One was doomed to fail from the beginning. T-Mo simply couldn’t push the amount of units that Google desired.

Having said that, T-Mobile failed to market the phone well in the first place. There were relatively few television advertisements featuring the phone, and a tiny online marketing push. In fact, Google threw the most weight with its homepage advertisement for the Nexus and major AdWords push. Still, for a phone to push millions of units, it’s expected that carriers spend at least a little bit of dough to bring in the buyers.

Finally, a plethora of users complained that the Nexus One wasn’t supported well enough at launch. There were numerous issues with 3G reception and then WiFi once the Froyo update was made available.

Moving Forward: Google’s Nexus S

Google pushed out their second Nexus phone— the Nexus S— on T-Mobile, AT&T, and Sprint in the States. Analysts estimate sales increases around 140% on top of the Nexus One. That means we’re looking at possibly just over one million sales.

How can we account for the increase? First, we’ll note that the Nexus S was available with a subsidy from T-Mo, Sprint, and AT&T. In the United States, consumers expect subsidized phone prices, so this helped push those Nexus S sales up. In addition, Sprint made a pretty large advertising push on behalf of their Nexus S 4G with the ever-popular Cats commercial. It seems that carrier advertising is a crucial component to the device’s relative sales success.

Still, the Nexus S sold nowhere near the Galaxy S II’s fifteen million units or the iPhone’s over twenty five million. Part of the reason behind the still-present failure here lies in the relative specifications of the Nexus S. Since it was essentially a release based off of Samsung’s already-released Galaxy S, consumers felt less impressed by the device.

Galaxy Nexus: Google’s All-Star?

Will the Galaxy Nexus be Google’s first sales success? Time will tell. For now, we can look at a few things the Galaxy Nexus has going for it: Verizon availability, excellent timing, revolutionary software, intriguing hardware, and that Android-obsessed cult following.

Many Android fans groaned when Google and Samsung announced the initial exclusive availability of the Galaxy Nexus on Verizon’s network. But, somewhere behind closed doors, analysts were grinning at the move. The Galaxy Nexus will be Verizon’s first Nexus release, but it’s certainly not the first Verizon Android device. In fact, Verizon holds nearly forty percent of the market share for Android devices worldwide. With devices like the Droid, Droid X, and Thunderbolt, Verizon proudly reps a storied Android history. So, Verizon’s a natural fit for a Google launch. In addition, with exclusivity, Verizon may be willing to push the device more than previous Nexus phones on other carriers. Since the device isn’t available on other carriers, it’s another notch on Verizon’s belt. It’s possible that the carrier could deploy television and/or in-store advertisements on behalf of the Galaxy Nexus in a way that T-Mobile, AT&T, and Sprint never matched with previous Nexus phones.

With two-year contracts in mind, it’s been just over twenty four months since the launch of the original Motorola Droid. Tons of Motorola Droid owners, Android frontiersmen of sorts, are looking out for a Nexus release. That means Google’s encountered nearly perfect timing for the launch of another revolutionary Android device. The millions of Droid owners on Verizon’s network may be looking to go Nexus when their upgrade bell rings.

Why would they go Nexus over Motorola’s new Droid RAZR or HTC’s Rezound? It’s simple— Android 4.0 aka “Ice Cream Sandwich.” Android 4.0 is arguably the largest update since Android’s release in 2007. It completes Google’s efforts to completely redesign the user interface behind Android phones. In a tech world that constantly emphasizes the greatness of “what’s new,” consumers will be instantly attracted to that substantial, brand new Android 4.0 software.

But, the Nexus isn’t just a great piece of software. In fact, the Galaxy Nexus is one of the first devices to launch worldwide with a high-definition 720p display. It’s packing a dual-core processor, NFC support, and a respectable Samsung design.

By far the biggest advantage for Google with the Galaxy Nexus: Android’s massive cult following. The massiveness of the Android blogosphere demonstrates the truly large influence of Google’s following. Users are so incredibly excited for this Android progress that they may flock to Verizon stores and hand over their money. This cult following’s made up of mostly 18-30 year old males with a healthy dose of tech knowledge. These are the guys that each person goes to for advice— “Hey man… which phone should I get?” Google’s banking on recommendations and general online buzz to push the Galaxy Nexus to the top. We know the device has already sold well among these communities of tech-obsessed nerds. The level of influence is up for debate.

Conclusions

With all of these factors seemingly pushing the Galaxy Nexus in Google’s favor, we could see a massive improvement in sales over the last two Nexus phones. The software, hardware, and cult favoritism behind the Nexus’ buzz could propel this device initially. But, it’ll be up to Verizon in the United States to market the device in a way that no carrier has done before.

Some analysts have speculated that Verizon will continue to push Droid RAZR sales over the Nexus throughout the holiday season. If true, this could mean a serious blow to Google’s Galaxy Nexus strategy. With the previous Nexus devices, bad sales numbers hinged on poor carrier support. It appears that the Galaxy Nexus’ success will again hinge on carriers’ desire to market the device. If Verizon chooses to proudly wear the Galaxy Nexus banner, we could see sales in the two to five million range. If not, the device will go down in history as yet another cult classic from Google.

Let us know your predictions in the comments!

5 Responses to “Galaxy Nexus: Best Seller or Cult Favorite?”

  1. Coty Spence says:

    Fantastic article. As a Galaxy Nexus owner, I can safely say it’s the best Android phone on the market, mainly due to Android 4.0 though. I really wish Google would launch their own TV marketing campaign for this device, otherwise they’ll have to rely on Verizon to market it like you stated. 

    I didn’t know the Nexus One sold that bad! Jeeze. if Google would have done a decent marketing push I guarantee it would have sold 10x better.

  2. GettingLost says:

    Great article Kenneth!!!!

  3. sbono13 says:

    “In fact, Verizon holds nearly forty percent of the market share for Android devices worldwide”

    This is not remotely true. In their most recent reported quarter, Verizon revealed that they sold 3 million Android smartphones (700K of which were LTE). In contrast, Google activates 550K new Android devices a day, roughly 50 million in a 90 day quarter, meaning Verizon’s Android market share is 6% or so. Even in the US alone, Google probably moves 12 million Android devices a quarter (VZ would have 25% of that market). If you were referring to share of the total Android installed base, the Android userbase is roughly 225 million users, 40% of that is larger than the total Verizon subscriber base.

  4. Ycare says:

    I read time and time again from the android fanboys ( yes, they are as bad as teh iphone fan boys) about the FANTASTIC WONDERFUL EXCELLENT PERFECT nexus..Fact is ,IT SUCKS…The list is far too long and boring but for those of you who care to take advice form these people .good luck with your new time eater..IT DOES NOTHING WELL. it does some things NOT AT ALL…Just get off this website and do some searches for galaxy nexus, I thank you will see the REAL phone,it can’t hold a call, you can’t hear a call IF it made one, it can’t hold a 3g or 4g signal and forget it if it has to switch back and forth between the two…As I stated, the list is far too long DO your own homework and stay away form verizon and nexus !