Image: Google Nexus One
Jeff Chiu  /  AP file
Google's Nexus One price — $529 unsubsidized — may have hurt its sales, as did the fact that only one carrier, T-Mobile, offered the phone at a discount of $179 with a two-year contract.
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msnbc.com
updated 7/19/2010 1:58:29 PM ET 2010-07-19T17:58:29

Google's Nexus One phone, touted as a "super" phone by Google and a key iPhone competitor when it launched in January, is now history in the United States. The search giant said it will no longer sell the phone via its website once existing stock is depleted.

"Once we sell these devices, the Nexus One will no longer be available online from Google," the company said on its blog. "Customer support will still be available for current Nexus One customers. And Nexus One will continue to be sold by partners including Vodafone in Europe, KT in Korea, and possibly others based on local market conditions."

The Nexus One got high marks from reviewers, and is considered a signature Android phone, using the operating system that Google helped create. But it has struggled to find a market. The advent of other high-profile Android phones — including those built by HTC, which makes the Nexus One — have marked stiff competition, and lessened the need for Google to sell a gold-standard phone of its own. Notable models include Motorola's Droid, Droid X and HTC Droid Incredible running on Verizon Wireless, Samsung's Galaxy S, which will appear on a variety of carriers, and the HTC Evo, which runs on Sprint's high-speed 4G wireless network. 

Sales of the phone were also hurt by Google's novel and early efforts to sell the phone only via its website, with spartan customer support in the first weeks after the $529 phone became available.

"With only a small percentage of handset sales going through the Web, it was difficult for the Nexus One to gain much momentum," said Ross Rubin, NPD Group analyst. "Google may have backed into such limited distribution to avoid competing too directly with its (Android) handset partners."

Customers could order the phone to be used on T-Mobile's network, and pay $179 for it with a two-year contract. The Nexus One also runs on AT&T's network, but the carrier does not subsidize the cost of the phone, as it does with most others. Sprint, which had indicated it would run the Nexus One, later changed its mind, with the company saying it would instead concentrate on the new HTC Evo. (Verizon Wireless also quietly backed away from supporting the Nexus One.)

Then, in May, Google said it would stop selling the Nexus One on its website "once we have increased the availability of Nexus One devices in stores." That did not happen.

While Google has not released sales figures for the Nexus One, "it's likely in the hundreds of thousands, not millions," said Michael Gartenberg, vice president of strategy and technology analysis at Interpret, LLC.

"It was an experiment in retailing that might not have succeeded, but it also redefined the standard for Android devices and that was successful," he said. "Google managed to drive hardware partners to better designs, specs and features in order to stay competitive."

The Nexus One, with its 3.7-inch touchscreen and 5-megapixel camera, "remains one of the best Android devices on the market," Gartenberg said.

The phone is the second high-profile one in a month to be abandoned by its creator. Microsoft's Kin, a social networking phone carried by Verizon Wireless, was discontinued in June after only six weeks on the market. (Msnbc.com is an NBC Universal-Microsoft joint venture.) Some attributed the failure not to the phone's sticker price but to the fact that Verizon decided to charge customers for a full smart-phone data plan, in spite of the phone's limited functionality.

Google's Nexus One announcement came Friday, the same day Apple CEO Steve Jobs held a press conference about the iPhone 4 and its antenna issue, saying iPhone 4 owners will get free bumpers to deal with the reception problem caused by how the phone is held.

"Earlier this year, we announced that we will be closing the Nexus One web store," Google said on its blog. "This week we received our last shipment of Nexus One phones. Once we sell these devices, the Nexus One will no longer be available online from Google ....

"To ensure our developers have access to a phone with the latest Android OS (operating system), Google will be offering the Nexus One through a partner for sale to registered developers."

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