Sales forecast slashed for Google's Nexus One - 70% down

Launched with huge pizazz last year, Google's entry into the handset market is turning sour as shipments fail to reach expectations after the company had promised to reshape consumers' smartphone perceptions and fundamentally change the way handsets were purchased.

According to Goldman Sacks, the Nexus One sold 20,000 in the first week after its launch, and 80,000 in the first month--leading to an estimate of one million sales in its first year. "This is significantly adrift from our previous estimate that Google might sell 3.5 million Nexus One units in 2010," said the firm.

The company stated that the poor sales of the Nexus One for this year have suffering from limited marketing activity with only Vodafone in Europe promoting the handsets, and increased competition from vendors such as HTC with its Desire product.

With the assumption that Google would unveil a second Nexus handset later this year - and market it more aggressively, and making it available offline, Goldman Sacks has revised it forecasts and now believes Google will sell two million in 2011 and future years. However, this estimate would seem to include Motorola becoming involved with the design and manufacture of new Nexus handsets.

Interestingly, the likelihood of a stripped down version of the Nexus One for developing countries like India and Russia now seem very possible. A slimmed down version of the handset is being positioned for launch in the last quarter of 2010, with a price of Rs24,000 being speculated.

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