Home > Google, Idiots > Why Google Should be selling the Nexus One for $99.

Why Google Should be selling the Nexus One for $99.

[tweetmeme]I’m going to say this as plainly as I possibly can: If Google doesn’t sell the Nexus One unsubsidized for $99 to every country in the world, right now, it wants the Nexus One to fail.

An extreme statement, you say? No it isn’t, shut up.

For all of those of you who’ll say I’m missing the point, or that I’m saying the phone sucks, or something, let me be clear: the phone is perfectly nice. It’s worth the money you pay to buy it. All of what I’m saying here is predicated on the idea that Google’s trying to change something, that this phone is meant to be A Goddamn Big Deal. Got it?

Right now, customers are screwed.

Right now, you can get the phone for $529 or $179. $179 for a subsidized phone is okay, except that most people aren’t on the single carrier currently selling the Nexus One for a subsidy, which means that in order to enjoy the phone, most people will need to cancel their current account to get the subsidized pricing, and those early termination fees don’t exactly make the thing cheaper. In those cases, most people will say screw it and buy the phone on subsidy, because they just had to already pay a couple hundred goddamn dollars for the privilege of being a free agent.

How Google can fix it.

Google needs to subsidize the phone themselves in order for it to succeed. It’s that simple. The question, once that immutable fact has been established by me — I’m the goddamn kingmaker! — is how much subsidy should Google provide, and why?

The price needs to be more than free. Free is great, and everything — I love me some free sex — but if you give someone something for free, they’ll tend to think of it like it’s disposable. Much like Microsoft Works, People respect call girls, not sluts. But why should Google subsidize the cost of the phone? They themselves have said that the phone is an entry point to getting more people online more during the day, because once people get online, Google’s got you like a case of herpes (you may respect call girls, but that doesn’t make them clean). So more users of Nexus One means more money for Google, which means they can afford to sell the thing at a discount. How much of a discount? As much as they can without being unable to make the money back.

I’m just going to take a wild guess and say that $99 would work for them.

That’s a pretty steep drop from $529, but Google makes a lot of money off its users, and it’s not like they wouldn’t be able to get HTC to sell them the phones at a goddamn discount, or something. This is Google, after all. A bonus to a $99 price point would be that they’d actually be competing with the iPhone. I mean, how can you have an iPhone killer that costs more than the iPhone? It’s ridiculous.

Now, sure, lots of tech industry wankers will say that the phone competes in features, and that’s true, but so what? You can buy an iPhone for $99. Can you buy this phone for $99? No? Then you’re going to lose average consumers who aren’t aware of the different product versions, who have no goddamn idea what a magnetometer is, and don’t care to. Average consumers are idiots, and when they see two shiny phones, one of which is more expensive than the other and has fewer apps, which are they going to choose? Exactly.

Hey Google, you know who the average consumer is, right? They’re the most of the world who aren’t technically savvy, who don’t want to be, who actually leave the house voluntarily, have normal human relationships, and get laid sometimes. I’m sure none of that sounds familiar, but they exist, and they outnumber you.

Is $99 too much of a subsidy for you, Google?

Let’s pretend for a moment that Google wants to get everybody on their phone, but they won’t be able to make back enough money per-user to justify a $99 price tag. I doubt that’s the case, but let’s pretend. In that case you could still offer an unsubsidized phone for, say, $199, and let your precious mobile carrier partners knock the extra $100 off on contract. Bam. You’re welcome, Google.

Haven’t you ever heard of razor blades?

Since Google is looking more and more like Microsoft, with their greasy Redmond-based tentacles slithering over every pure, helpless industry they see, using the phone as a loss-leader makes perfect sense. This is about as old a sales technique as you can get, after all; you drop the price on the front-end, and take a loss on the initial purchase, and charge more for the recurring purchases on the back-end. Microsoft did this with the XBox 360, because they made money on their video games and the accessories, and because even more importantly, it got them a set-top box in 5 million living rooms, and they can make money serving up movie rentals, and all sorts of other crazy shit.

Go and do likewise, Schmidt. Go and do likewise.

Don’t mess this up, Google.

You have an opportunity here, Eric Schmidt. You have a great phone, and you have the deep pockets to get it out to a large number of people for a low price, and best of all, you have an infrastructure to recoup all of that money — and more — once these brand-new customers start using it. You are shooting yourself in the foot if you don’t do this.

Shut up.

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  1. shafe
    January 7, 2010 at 12:44 pm

    you cant buy an iPhone for $99 unsubsidized. if i were choosing between a previous generation 8GB iPhone 3G (not 3GS) for $99 versus a $179 nexus one.. well i think there’s no competition. the nexus one is way better for the extra $80, which is a small amount when compared to the ~$2000 you’ll spend on either phone over 24 months time in service charges.

  1. January 6, 2010 at 4:29 pm
  2. January 24, 2010 at 12:31 am

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