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Edition: U.S. Article Comments (2) Save Email Print Reprints Most Popular Most Shared Thai protesters defiant, more fighting feared | Video 2:02am EDT Google to stop selling smartphone online 12:44am EDT U.S., UK issue warnings on Bangkok 15 May 2010 WRAPUP 1-Under pressure, BP tries again to contain oil spill 2:05am EDT USGS reports moderate earthquake in Puerto Rico 1:42am EDT Obama pushes Wall Street reform with populism 15 May 2010 U.S. Episcopal Church consecrates lesbian bishop 15 May 2010 North Korea boats draw warning shots from South 15 May 2010 Exclusive: Waddell is mystery trader in market plunge 14 May 2010 Euro-zone troubles may keep stocks on edge | Video 14 May 2010 USGS reports moderate earthquake in Puerto Rico 1:42am EDT U.S. reverses stance on treaty to regulate arms trade 14 Oct 2009 Thai protesters defiant, more fighting feared | Video 2:02am EDT Burmese monks who fled to U.S. a vanishing breed | Video 14 May 2010 Google to stop selling smartphone online 12:44am EDT Obama pushes Wall Street reform with populism 15 May 2010 Even teddy bears need a holiday...in Finland 12 May 2010 FDA: Glaxo, Merck vaccines OK despite pig virus 14 May 2010 U.S. Episcopal Church consecrates lesbian bishop 15 May 2010 U.S., UK issue warnings on Bangkok 15 May 2010 Google to stop selling smartphone online Alexei Oreskovic SAN FRANCISCO Sun May 16, 2010 12:44am EDT Related News Google says mistakenly got wireless data 12:45am EDT Google says mistakenly got wireless data Sat, May 15 2010 Top U.S. carriers plot faster gadgets, services Fri, May 14 2010 Verizon sees slew of high speed devices Fri, May 14 2010 UPDATE 3-Google says mistakenly got wireless data Fri, May 14 2010 A model demonstrates a Nexus One smartphone, the first mobile phone Google will sell directly to consumers based on its Android platform, after a news conference at Google headquarters in Mountain View, California January 5, 2010. Credit: Reuters/Robert Galbraith SAN FRANCISCO (Reuters) - Google Inc is closing its 4-month-old online cell phone store, abandoning an ambitious plan by the Web search leader to redefine wireless retailing. Technology | Media Google said on Friday it will stop selling its Nexus One smartphone through its online Web store and will instead work with partners to sell the device through retail outlets. "It's clear that many customers like a hands-on experience before buying a phone," Google Engineering Vice President Andy Rubin wrote on the company's official blog announcing the change on Friday. Rubin acknowledged that Google's online mobile phone Web store had not lived up to expectations, never growing beyond a "niche channel for early adopters." The move comes shortly after Sprint Nextel and Verizon both scrapped plans to support the Nexus One phone that Google sold online and represents a significant scaling back of Google's ambitions in the wireless industry, said BGC Financial analyst Colin Gillis. "They clearly have retreated from the model of revolutionizing the method in which we acquire our smartphones," Gillis said. Still, analysts noted that Google's challenges with its online phone store come as the search giant is making gains against Apple Inc and Research in Motion in the smartphone market with its Android software. A dozen handset makers offer devices that feature Google's Android smartphone operating system and more than 65,000 Android-based devices are shipped everyday, according to Google. A report by NPD Group released earlier this week said that Android became the second most popular smartphone operating system in the United States during the first quarter, behind Research in Motion, and displacing Apple's popular iPhone for the first time. Apple has disputed the study's findings. "There's clearly an appetite, and there's clearly traction in the Android device area," said RBC Capital Markets analyst Ross Sandler. For Google, which generated nearly $24 billion in revenue last year, primarily from online advertising, making sure that it has a strong presence in the fast-growing smartphone sector is critical. "Google's entire philosophy around mobile is they want to make sure that they're the default search engine as users transition from PCs to mobile for Web browsing. That's the overall strategy," said Sandler. But Google's plans to carve out a larger role for itself in the broader wireless industry were less successful. Google opened its Web store in January, offering the sleek Nexus One handset as the first of what it promised would be many more devices available for sale. The Nexus One, which Google designed in close collaboration with HTC, was available for $179 with a two-year contract from Deutsche Telekom's T-Mobile USA, or $529 without a service plan. In an interview at the time, Google's Rubin said that by selling the phone directly to consumers, Google would be able to cut out extra retailing costs and ultimately deliver phones with lower price tags. "There's a lot of people in the value chain who don't need to be there," said Rubin. "And then prices can go down, iteration can happen quicker, distribution can be wider." But BGC's Gillis said Google's plans posed a threat to the established wireless carriers which have traditionally controlled handset sales through their retail stores. "Part of that equation could have turned the carriers into commodity pipe offerings," said Gillis. Google said in January that a version of the Nexus One that works on the Verizon Wireless network, a joint venture of Verizon Communications and Vodafone Group Plc, would be available in the United States in the spring; and in March Sprint announced its own plans to support the Nexus One. But in recent weeks, both companies have said they will not offer the Nexus One phone after all. The fact that Google did not heavily promote the Nexus One, skipping the television advertisements common in the mobile phone industry, may have limited its sales. Analysts estimate that Google sold 150,000 to 200,000 Nexus One phones during the first quarter. By contrast, Apple sold more than one million iPhones in the first three months of its availability in 2007. Google said on Friday that once the Nexus One smartphone becomes available at retail stores, Google will stop selling handsets via the Web store. Google said it will use the online store as a "window" to showcase Android phone available globally. "We believe that the changes we're announcing today will help get more phones to more people quicker, which is good for the entire Android ecosystem: users, partners and also Google," Rubin wrote on Friday. Shares of Google fell 0.66 percent to close at $507.53 on Nasdaq in an overall weaker market. (Reporting by Alexei Oreskovic; Editing by John Wallace, Gerald E. McCormick and Richard Chang) Technology Media Comments See All Comments (2) | Post Comment May 16, 2010 1:48am EDT Here a blog I wrote 2 weeks ago Google is ensuring that people don’t buy Nexus One Before starting blog, let me that I am fan of Google, and now here I explain my we feel what I said in title. We decide to buy a new phone for my wife and after doing some initial research, end up with two options – iPhone or Nexus One. After Gizmado leak and hoping that Apple will announce a new phone in June, that won’t be a good idea to get iPhone now and makes sense to wait for sometime. So meanwhile let’s get Nexus One. It’s unlocked, has better hardware that iPhone (bigger camera, processor, screen) and doesn’t force me to buy a data plan. Hurray, let’s get it. So before making that $580 (post tax) purchase, I want to try my hands on Nexus One. Is there any place where I can go and see a nexus one –> Yes go to Google online store, place your hand next to laptop screen and see for yourself how would it fit in you hand. —> Naah, doesn’t make me happy but won’t stop me from getting one too. Now next question I have is where can I get sim for this unlocked phne. Well google assumes that you already have a T-Mobile or AT&T sim in your old phone that you can pop into this new one. Well might be true but how about people like me who are switching from Verizon (Or is that extremely rare scenario?) –> Would be great if Google can give option to buy a prepaid sim of leading carries while ordering this phone And this thought leads me to realise that unlike iPhone or any other online phone store, google doesn’t have accessory store for nexus one. Since I got the phone for my wife, she didn’t like the native gray look and wanted to buy a colorful case. I wanted accessory kit that gives me basic additional things like skin protector and car charger. –> For this nothing setup from Google. I would have loved to order accessories while buying the phone and Google could have arranged that by tie up with others like Amazon.com Accesories in market –> When I wanted to buy the case from Mall in Los Angeles, I realised that there is hardly any awareness about this phone. Radioshack sales lady never heard of this phone (She had a wall full of iPhone accessories). Shipping time –> Great that Google provides overnight shipping, but would be great if they can ship over weekends as well. Why ship only on business days in world of 24X7? In short, after going through this, my wife made comment that summaries my experience with Nexus One buying –>”Google is ensuring that people don’t buy Nexus One” Thanks for reading this blog, please leave thoughts on this Tanmay_H Report As Abusive May 16, 2010 3:08am EDT When will companies realize that they can make more by subsiding these phones and make a monthly fee over the $150 they lose by selling at cost (i.e. cost of production vs. retail cost) I have been rocking an unlocked phone for the last 3 years…not that I’m saving money, but I do retain the power to leave the next time they screw me over. jrock79 Report As Abusive See All Comments (2) Add a Comment *We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language or appear to be spam and review comments frequently to ensure they meet our standards. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. © Copyright 2010 Thomson Reuters Editorial Editions: Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom United States Reuters Contact Us Advertise With Us Help Journalism Handbook Archive Site Index Video Index Analyst Research Mobile Newsletters RSS Podcasts Widgets Your View Labs Thomson Reuters Copyright Disclaimer Privacy Professional Products Professional Products Support Financial Products About Thomson Reuters Careers Online Products Acquisitions Monthly Buyouts Venture Capital Journal International Financing Review Project Finance International PEhub.com PE Week Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

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