Kennedy+Strategy+Report

Kennedy M

TO: Proximity mobile team FROM: McGregor Kennedy DATE: March 2, 2010 SUBJECT: Google-Nexus One strategy analysis

With Google’s recent release of the Nexus One, many analysts believe poor customer service and a lack of applications could jeopardize Google’s move into the mobile market. If they can resolve their customer service issues, Gen-Y users may be more likely to purchase the Nexus One.

The Nexus One is Google’s first cellular phone. Google is an internet based service provider who specializes in internet search technologies. The company was founded by Larry Paige and Sergey Brim in 1998. It wasn’t until 2004 that Google made their IPO (initial public offering). Currently Eric Schmidt serves as their CEO in Mountain View, California. (Google)
 * Profile**

Google’s major revenue stem from advertisement with the breakdown as follows:
 * 99% revenues from online advertising
 * 1% revenues from licensing and other

The Nexus One faces forces from other, similar, competitors who have already established their name. Many Smartphones on the market already incorporate standard features along with their own applications. Apple’s iPhone has had a successful run thus far; it incorporates many standard features while adding Apples trademark items such as iTunes and their application store. RIM’s Blackberry also does a good job of adding originality with their Blackberry Messenger (BBM) system. (Ostrow, 2010)
 * Competitive Landscape**

Google is also competing against experienced cellular services. Many Smartphones are covered by great customer service which Google has yet to figure out. It is unclear what direction this landscape will go, but it is apparent people are looking for new technology and better service to be incorporated.

Google’s main objective is to make money through targeted search ads which run off the phones operating system. Therefore, Google plans to market their phone on as many networks possible. Aside from T-Mobile, Verizon Wireless will now be offering the Nexus One beginning on March 23rd and Vodafone to follow in April. (Boulton, 2010)
 * Nexus One’s Strategy**

Google employees are also working to create more applications, they plan to create more applications to compete with Apples 90,000 applications. Currently Google only carries 20,000 applications for their android operating system. Google’s customer service issues are subsiding. Originally the only customer service available was an online support chat. They have now upgraded to a full customer service line, but still have issues resolving problems. (Ganapati, 2010)

Nexus One has the potential to become a top seller in the mobile market, but its lack of applications makes this phone unattractive to Gen-Y users. The phone is similar to the iPhone, and many people may not want to risk purchasing a new phone that does not have anything outstanding to offer.
 * Gen-Y Implications**

I believe that in order for Google to break through to Gen-Y, they will not only need new applications, but also improved customer service will be vital. Google has received many complaints concerning software glitches since the release in January. If these are not handled in a timely fashion, Google will lose many customers. Apple has been able to provide applications and customer service. If Google cannot rise to the challenge they may have trouble finding success in the mobile market. = = =References= Boulton, C. (2010, March 1). //Google Nexus One Marching to Verizon March 23, Vodafone in April .// Retrieved March 1, 2010, from E Week: http://www.eweek.com/c/a/Mobile-and-Wireless/Google-Nexus-One-Marching-to-Verizon-March-23-Vodafone-in-April-573377/ //Google//. (n.d.). Retrieved Feburary 22, 2010, from Wikipedia: http://en.wikipedia.org/wiki/Google Gustin, S. (2010, January 11). //Google's Nexus One Backlash: Shoddy Service.// Retrieved Feburary 22, 2010, from Daily Finance: http://www.dailyfinance.com/story/googles-nexus-one-backlash-shoddy-service/19312087/ //Nexus One//. (n.d.). Retrieved Feburary 22, 2010, from Wikipedia: http://en.wikipedia.org/wiki/Nexus_One Ostrow, A. (2010, Feburary 2). //Nexus One vs. Droid vs. iPhone.// Retrieved Feburary 27, 2010, from Mashable: http://mashable.com/2010/01/05/nexus-one-vs-droid-vs-iphone/