Can the world’s number one search company design and sell a mobile phone to consumers direct via the internet? With the launch of the Nexus One smartphone on January 5, 2010, Google set out to answer that question.

74 days later, we have a reasonable estimate of how many Nexus Ones Google has moved: 135,000. The hard part: answering that first question.

The 74-day mark is notable because, according to mobile analytics firm Flurry, that’s how long it took Apple to sell one million iPhones. Apple, of course, has fast become a Google rival, and Apple’s lawsuit against HTC directly targets the Nexus One.

Not surprisingly, the fact that Google has moved only 135,000 Nexus One devices has lots of observers calling ‘flop‘. But I’m not so sure it’s that simple. Here’s why:

• Google isn’t a hardware company. That’s no excuse for a poor showing, but let’s put it this way: if the Nexus One faded into oblivion, it wouldn’t hurt Google. If Apple, on the other hand, releases a device that doesn’t sell, analysts will start screaming that the world is ending.
• Selling direct-to-consumer model was bound to reduce demand. The Nexus One is sold directly to consumers via the web; it’s not sold through carriers like most other phones. That inevitably reduced the size of the Nexus One’s potential market right off the bat since many consumers are only realistically going to purchase a phone via carrier. After all, that’s the model consumers are used to, and there’s less effort involved.
• Google’s gains in mobile should be measured by Android, not the Nexus One. Google’s big play in mobile is its operating system, Android. That’s where it has the most to gain, and where rivals like Apple have the most to worry about. Android market share rose to 7.1% in the fourth quarter of 2009, up from a mere 2.8% in the previous quarter. Increasingly, Android is making its way onto popular handsets, such as the Motorola Droid, which sold 1.05m units in its first 74 days according to Flurry.

All of this said, 135,000 Nexus One sales certainly isn’t going to knock anyone’s socks off no matter how well you spin the number. There are valid arguments to be made that Google shouldn’t be making smartphones and that it was foolish for Google to pretend that a direct-to-consumer distribution model might even disrupt carriers. I’m critical of many of Google’s ‘side projects’ and think in the aggregate, all of these little distractions are likely to cause the company trouble.

But all those who focus on calling the Nexus One a flop are missing the big picture.

Photo credit: mackarus via Flickr.