Google Leans on Vodafone in Europe

Google (Nasdaq: GOOG)'s decision to use Vodafone Group plc (NYSE: VOD)'s sales channels for the European debut of the Nexus One device shows that the company is still on a learning curve in the mobile device market, according to a leading industry analyst.

For European markets, Google will rely on the sales channels of its mobile operator partner to sell the Nexus One, rather than its own Internet outlet. This is a marked departure from Google's sales strategy in the US, where consumers buy the device through Google's own Web store. (See Google's Nexus One Lands in Europe.)

This change in strategy shows that "Google is learning," says Ben Wood, analyst at CCS Insight . "Dealing with mobile channels is not as straightforward. It's the same learning curve Apple Inc. (Nasdaq: AAPL) went through… They've found that subsidies were an important tool in driving sales."

Any change in Google's strategy for the Nexus One is significant because of the implications for the search giant's broader mobile strategy, rather than for the device itself. When Google launched the device early this year, the Internet company made waves in the mobile sector with its intention to sell it directly to customers, rather than go through mobile operators. (See Google Introduces 'Nexus One' Phone, Nexus One Won't Support AT&T's Fastest 3G Data Services, Open & Unlocked. So What?, AT&T Wants Nexus One Users' Cash, Gadget Watch: Google's Nexus Spreads, and Google's Nexus One: One Ring to Rule Them All.)

"Nexus One is the poster child for Google's aspirations in the mobile space," says Wood. "It's the first phone sold directly by Google. But it's not an order of magnitude different from what's already available on the market."

But Wood also notes that Google's shift in retail strategy is not surprising considering that the Nexus One is now "a bit of an old phone now," given the short lifespans that high-end devices have.

"Google has little to lose allowing the Nexus One to go into Vodafone's channels," says Wood.

In response to Light Reading Mobile's questions about its European sales approach, a Google spokeswoman emailed this statement: "We have decided that the best and fastest way to get Nexus One into the hands of European consumers is through our partners."

When Google's phone launches in the UK on Friday, consumers will be able to buy the device from Vodafone either in stores, online, or by phone. The operator has already started taking pre-orders for the device.

Vodafone will soon launch the device in France (via SFR ), Germany, Italy, the Netherlands, and Spain.

— Michelle Donegan, European Editor, Light Reading Mobile

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