Sprint Snubs Google’s Nexus One

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Sprint Nextel (S) has reportedly abandoned its plan of selling Google’s (GOOG) so-called “Superphone” Nexus One. Instead, the third largest US wireless operator will focus on its forthcoming 4G smartphone HTC EVO 4G, which the carrier reckons is a better option for its subscribers. The move makes Sprint the second major national carrier to dump Nexus One after Verizon (VZ). This is bad news for Google as it disrupts the Internet giant’s marketing strategy for the device. Sprint announced in March 2010 that it will offer a CDMA version of Nexus One to its customers. However, the carrier has flipped its decision on the device in favor of EVO 4G, which is superior in terms of phone features and is being designed to run on a faster network. Manufactured by the Taiwanese handset giant HTC, Nexus One is Google’s own branded Android smartphone (launched in January 2010), positioned as a challenger to Apple’s (AAPL) iPhone. The current GSM version of Nexus One is being sold directly through Google’s website for an unsubsidized price of $530 and at a subsidized price of $180 under a two-year contract from Deutsche Telekom’s (DT) US arm T-Mobile USA. Google plans to revolutionize the current carrier-dominated US cell phone market by establishing an online marketplace for handsets. However, this new model so far has failed to meet expectations. Despite being one of the most sophisticated smartphones available today, Nexus One has been far from impressive in terms of sales volume. Industry data reveal that merely 135,000 units of Nexus One were sold after 74 days of its launch compared to 1 million iPhones and 1.05 million Motorola (MOT) Droid smartphones. This can be attributable to the phone’s limited distribution and lackluster promotional support. To boost sales, Google is desperately looking to expand Nexus One to multiple carriers, which will broaden customer reach. As a part of this effort, Google released a new version of Nexus One in March 2010, which is compatible with AT&T’s (T) 3G network. Apart from Sprint, Nexus One was also supposed to be carried by Verizon. However, Verizon rebuffed plans to offer the device in April 2010 as the carrier was preparing to launch the much-hyped HTC Droid Incredible (launched on April 29) Android smartphone, which boasts slightly better features vis-à-vis Nexus One. Sprint’s move has put the future of Nexus One in question as the device misses the opportunity to reap the full advantage of the carrier’s vast nationwide 3G network coverage, claimed to be greater than AT&T and T-Mobile USA. Moreover, the lack of backing from Sprint and Verizon has effectively trimmed Nexus One’s addressable market. Meanwhile, Sprint is gearing up for the launch of EVO 4G (expected in June 2010), the world’s first 4G smartrphone. The feature-rich dual-mode (3G/4G capable) device, which will run using the Android platform, is expected to play a major role in boosting the adoption of the carrier’s 4G network. Besides, EVO 4G will give Sprint a headstart over its bigger rivals Verizon and AT&T who are yet to launch their 4G network based on the Long-Term Evolution ((LTE)) standard.Complete Story »