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A New Google Nexus Phone: Were Things Going Too Well, Mr. Schmidt?

Google (GOOG) CEO Eric Schmidt teased a new Nexus smartphone. After the business disaster that the Nexus One represented, why go down the same path? Because in the absence of a larger coherent direction, Google continues to feel pulls in every direction and Schmidt is incapable of resisting the siren's call.

Here's a video of Schmidt's appearance at the Web 2.0 conference, during which he tried his best to be coy when referring to the phone, brand label covered with tape, that he used to demonstrate some features of the latest Android release:

Schmidt wanted to emphasize the NFC, or near field communications, capabilities that would allow a phone to act as a payment device at retail or a reader to acquire useful information, like location or data from RFID chips in products. The headline quote? "Eventually replace, literally, credit cards." Now there would be a lucrative business that was not another version of selling ads.

But Google's run with the first Nexus One was incredibly inept:

  • major product problems
  • a price and market strategy that made it too expensive for most people
  • customer service that made cable television providers look good
  • design that essentially shackled the phone to one carrier, even though it was supposed to be free of restrictions
  • inherent conflict with all the handset vendors that also produced Android phones
You could argue that any new venture will have rough corners and it takes time to learn. However, it's a bad sign when a company with the resources of Google doesn't combine them with some common sense steps, like remembering what it's like to be a customer or hiring people who actually know how to do the kind of work the new business entails.

Last week, while talking about Google's poor PR in firing the engineer that leaked the memo about the 10 percent across-the-board pay raises, I semi-jokingly said that the drive to keep things secret was evidence that Schmidt wanted to become Apple (AAPL) CEO Steve Jobs. Now I'm beginning to wonder if that's actually uncomfortably close to the truth.

If insanity repeatedly doing the same thing but expecting different results, what do you call the Google plan to sell another Nexus phone? Strategy, my friends, strategy.


Image: O'Reilly