Was the Nexus One’s Initial Sales a Flop? Hardly. Here’s Why

Here’s a good illustration of why it is always a good idea to look at an original source before believing what you read: From the Business Insider Silicon Alley Insider (let’s call this SAI for now):

The Nexus One Is A Flop: 74 Days In, Just 135,000 Sold

Wow! Great attention grabbing title, right? Unfortunately, it only tells a partial story. Now, let’s take a look at Flurry’s original item based on data they gathered:

Day 74 Sales: Apple iPhone vs. Google Nexus One vs. Motorola Droid

Yep, that’s right, the original data and report looked at the first 74 days of sales of the Nexus One, iPhone, and Droid. The first generation iPhone sold a million units in 74 days. The Nexus One sold a mere 135,000 units. But, look at the Droid: It sold 1.05 million units in its 74 days. What does it prove? Here’s my interpretation:

1. The iPhone sold unbelieveably well considering that (a) many people, including me, thought Apple was nuts to enter the phone business with no prior experience and (b) that first iPhone was priced very high ($499 and $599). However, Apple’s success with the iPod and their incredible marketing launched what turned out to be a game changing product.

2. The Droid benefited from a massively expensive Verizon marketing campaign. I recall reading that something like $100 million was spent on the campaign. This means that Verizon essentially spent $100 for each for the first million phones they sold. The Droid wasn’t the first Android-based phone sold. So, unlike the iPhone, its base platform had some history with customers. One might almost expect that it should have sold much much more than a big over a million units in its first 74 days. But, I certainly wouldn’t call it a flop (note: I bought one).

3. The Nexus One had massive word-of-mouth interest, nearly zero marketing behind it, and could not be seen and touched in person by prospective customers. Its relatively high (but actually normal) unlocked price, $529, also factors in to its relatively low sales numbers. But, lets look at it a different way: With no marketing, it sold one-eight of what the iPhone and Droid sold in its first 74 days. And, it essentially sold to a very small vertical market segment of tech gadget geeks (like me). In this light, its sales seem remarkably high. I’m not calling it a flop.