The "Problem" With Nexus One is the Retail Packaging, Not the Phone

By some accounts, the Google Nexus One phone has not sold as many units as some might have hoped. Flurry, a mobile analytics firm, estimates that 20,000 Nexus Ones were sold in the first week. That tracks poorly compared to the myTouch3G, which sold up to 60,000, and the Motorola Droid, which sold 250,000 in the first week.

Some people really like the idea of "unlocked" phones, despite the full retail price, as the price of gaining freedom to use "any" carrier (in the U.S. market two of four major carriers). But so far, most U.S. consumers seem to prefer the old "closed" model, where they get discounts on devices in exchange for contracts.

Beyond that, there is the clumsy customer support process. Users can email Google and get an answer within 48 hours. I don't know about you, but if any service provider took that long to get back to me when I have a problem, they will not be my service provider much longer than that. I can easily find a replacement provider within two days.

But that's the problem with Google's current model. With the current model, a customer contacts Google, and hopes the problem is not something the carrier (T-Mobile) or HTC (the device manufacturer) has to fix.

That's no slam on the device. But the customer interface is wrong. People are used to buying from one retailer that "owns" the customer service responsibility. And people will not be happy with two termination fees for early cancellation of a contract--one charged by T-Mobile USA and a separate restocking fee levied by Google.

Ignoring the amount of the fee and the logic, that's just going to make people mad. People generally understand the early termination fee. But they don't expect to pay twice.

Unlocked phones have sold better in Europe, but there is a huge difference between the U.S. market and Europe. In Europe, when one buys an unlocked device at full price, it really does work on all networks. In the United States, Verizon and Sprint use the CDMA air interface while AT&T and T-Mobile use the GSM air interface.

So an unlocked phone will only work on half of those networks. Under such conditions, the value of an unlocked phone is dramatically reduced. But most consumers don't really care about air interface or "locking."

They are used to a retail relationship where they know who owns the product and process. And there still is not much evidence to indicate the value of an unlocked, full retail device is more important than the comfort of knowing who is responsible when something doesn't work properly.

Despite the generally-accepted wisdom that "open" ecosystems innovate faster (which is true), that doesn't mean customer experience is better. As Apple has shown time and again, a closed, tightly-integrated approach can produce a much-better experience and lots of innovation at the same time.

So far, it doesn't appear the unlocked Nexus One model is doing that.

Do People Want Dual Mode, Convergence?

Dean Bubley has a nice list of things that will happen in the wireless market this year. Several caught my eye, one of them being that in our rush for all things "converged," we might be missing something, and taht is that people might be better at managing multiple devices, numbers and identities than we usually give them credit for.

Bubley argues that suppliers and service providers have a hard time creating the "one device that does everything" because, in fact, "people are happy with complexity."

"People like multiplicity," Bubley argues. "They want multiple service providers."

Some people certainly seem not to mind complexity, multiple bills or providers. Others probably prefer to buy in a sort of "best of breed" mode, despite some incremental friction.

I suspect that although lots of people say they like triple play services because it is more convenient using one provider instead of three, the adoption driver really is the discount.

The issue here probably is that many attempts to converge functions, identities and so forth involve some compromises, some effort and some limitations. People might be willing to put up with some amount of complexity or effort to get more choice.

But not much. According to the Reuters news service, half of all malfunctioning products returned to stores by consumers are in full working order, but customers can’t figure out how to operate the devices.

Product complaints and returns are often caused by poor design, but companies frequently dismiss them as “nuisance calls,” Elke den Ouden found in her thesis at the Technical University of Eindhoven in the south of the Netherlands.

The average consumer in the United States will struggle for 20 minutes to get a device working, before giving up, the study found.

If Microsoft Had Designed GMail...

A funny spoof at http://blogoscoped.com/archive/2007-11-20-n35.html