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Google changes pricing options for Nexus One: 100 new reasons to purchase the N1

Customers who recently paid $379 for the Nexus One will soon be receiving a $100 refund from Google.  The refund does not apply to any other customers who purchased the Nexus One.

Android and Me Taylor Wimberly

Context & Ripple Effects

Google's web-store experiment with the Nexus One has hit turbulence in its first week: Flurry's estimate put first-week sales at roughly 20,000 units, a figure widely read as unimpressive given the launch buzz, and Google spent January 12 defending the device's double termination-fee structure against blogger backlash. The $100 refund to customers who paid $379 is the third move in that sequence — a pricing reset aimed squarely at the demand problem rather than a goodwill gesture alone.

The refund applies only to recent full-price buyers, not the broader installed base, and syndication on outlets like TmoNews shows the pricing news travelled fast through the Android enthusiast press within a day.

First-order effects

  • Customers who recently paid $379 for an unsubsidized Nexus One receive a $100 refund from Google, while earlier and other purchasers get nothing — an arbitrary-looking cutoff that risks annoying exactly the early adopters Google most needs as evangelists.
  • The effective entry price for new buyers drops by $100, directly addressing the value gap analysts flagged after the 20,000-unit first week.

Second-order effects

  • T-Mobile's subsidized channel and Google's web store are now priced against each other in public, forcing both parties to keep adjusting while the termination-fee controversy already has them defending the economics of the partnership.
  • Rivals like Apple can hold iPhone 3GS pricing steady and let the Nexus One's repeated repricing read as soft demand rather than competitiveness.

Third-order effects

  • If rapid post-launch repricing becomes the norm for direct-to-consumer phone sales, early buyers bear more risk than under carrier-subsidy models — and manufacturers selling their own hardware will need standing price-protection policies to keep early adopters buying.
  • Google's willingness to move pricing within two weeks of launch tests whether a software company can run consumer-hardware retail on web-store terms, a question the whole Nexus program exists to answer.

The trend: Direct-to-consumer smartphone sales are exposing how much carrier subsidies had been absorbing pricing volatility, pushing manufacturers toward explicit early-adopter protections.