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Google should walk, not run with Nexus One

Google is discovering what retailers have long known, that people are stupid and the first thing they do is call the support line. It did not scale its effort for an iPhone-like hit.
Written by Dana Blankenhorn, Inactive on

Walk, Don't Run was Cary Grant's final film.

A remake of 1943's The More The Merrier (which won Charles Coburn an Oscar for best supporting actor) it was a comedy about shortages, specifically the housing shortage that overtook Tokyo when the Olympcs came in 1964.

This difficulty in scaling is important to consider when looking at what has befallen Google regarding its Nexus One.

You can scale on the Internet by buying more resources or calling someone like AboveNet. In the real world it's not so easy, as Google is rapidly discovering.

Despite setting its price high and trying to set expectations low, there has been a "rush to the rail" for Nexus One, with reporters already pitting it head-to-head with Apple's iPhone, which has had years to get the kinks out of its channel.

Google is discovering what retailers have long known, that people are stupid and the first thing they do is call the support line. It did not scale its effort for an iPhone-like hit. Bad publicity is coming on fast, with critics telling consumers to hold off their purchase.

In some ways this is a good problem to have. (Google's problems are a smaller version of those in the Cash for Clunkers program.)

But it's still a problem.

Google is responding in a natural way, through profit maximization. It is telling buyers they're stuck, raising its early termination fee. It is keeping the price of the phone high.

This upsets entrepreneur Matt Asay, but Matt hasn't had to scale an organization in the twinkle of an eye before.

Google is trying to manage expectations. Over time the strategy remains what it was, namely to tag-team the carriers and to surround Apple with kit that works everywhere. That strategy is still on.

But before it can run that strategy, it needs to pull back on the reins a little bit. Give the rest of the Android hardware ecosystem a chance to catch up. Let the market grow organically and the apps will come.

We're trying to make a comedy here.

(Note to movie lovers. The Coburn version of the film is better. Grant was too attractive, even at age 60, to pull off the avuncular fairy godfather bit. Co-star Jim Hutton died of liver cancer in 1979 a year before his son, Timothy Hutton, won the Oscar for Ordinary People. )

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