Why is it a turkey? The Nexus One first appeared as a series of detailed rumors in the fall of 2009, and was unveiled at a packed press event by Google in early January. Google explained that the device--which ran on then-new software, Android 2.1--was a way to not only showcase the Android platform but for the company to provide consumers with a phone free from the influence of wireless carriers; Google planned to sell it online, directly to consumers. At the time, analysts praised the device but questioned the business model.
Google's sale of the Nexus One (which was made by HTC and available unlocked for $529 or for $179 through T-Mobile USA) did not go smoothly. Since the phone was marketed online, customers could not physically touch the device before purchasing it. Further, customers faced $550 in early termination fees--$350 from Google and $200 from T-Mobile (Google later cut its fee down to $150 after an FCC inquiry). And the phone initially launched without live customer support, though Google did eventually add a direct customer support line.
Despite the Nexus One making a profit for Google, it wasn't enough to save the direct-to-consumer model. Google shuttered the operation in May.
In one sense, Google's Nexus One was a smashing success. It moved the Android ecosystem along, paving the way for phones like the HTC Incredible, Motorola (NYSE:MOT) Droid X and Samsungs Galaxy S line of phones. On the other hand, though, Google's sales strategy backfired and the company learned that breaking out of the carrier-dominated model of phone sales is easier said than done.