Google Pulls Back on Plans for Phone

Google Inc. backed away from a plan to make its Nexus One smartphone compatible with Verizon Wireless, the largest mobile carrier in the U.S., a setback to the Internet giant’s effort to reshape the cellphone market.

The company Monday updated its Web site to tell customers waiting for the device that they should instead buy another smartphone running Google’s software.

Google previously indicated the Nexus One, which the company designed and sold directly to consumers, would be available for Verizon’s customers in the spring. A Google spokesman declined to comment on why discussions with Verizon fell apart.

After lackluster sales, it was Google that decided to pull the plug on a CDMA version of the Nexus One that would have worked on Verizon’s network, according to a person familiar with the matter.

Google hasn’t disclosed how many Nexus One phones it has sold since launching in January. Google executives have defended the phone, noting it is part of the company’s long-term mobile strategy and saying they are pleased with initial demand.

The announcement is a blow to Google’s only branded phone, as it won’t be available to Verizon’s more than 90 million subscribers any time soon. Verizon Wireless is owned by Verizon Communications Inc. and Vodafone Group Plc.

Vodafone Monday said it will start giving Nexus One phones free to U.K. customers who sign up for service plans and that the phone would be available in stores—a departure from the online-only approach Google has taken in the U.S. The Google spokesman said it has no plans to offer the phone in U.S. stores.

Verizon Monday distanced itself from Google’s phone. “Verizon had never made a comment or statement about the product coming to our network,” said a Verizon Wireless spokesman.

Google broke with convention when it launched its phone, saying it would sell it on a Web store with or without a cellphone contract. Google said its aim was to drive its Android operating system, the company’s response to Apple Inc.’s iPhone.

The Nexus One sells for $529 without wireless service. U.S. customers can also buy the phone for $179 if they commit to a two-year contract with Deutsche Telekom AG’s T-Mobile USA, the only U.S. carrier.

Resource:
http://online.wsj.com/article/SB10001424052748703465204575208283988502188.html?mod=wsj_india_main

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