Richard Martin Blog: Google's Next Move, Post-Nexus

So it’s official: the long-awaited death of the Nexus One (at least in North America), predicted in this space repeatedly, and announced by Google two months ago, has finally come to pass.

Google said that it received its final shipment of Nexus One phones and will be boarding up the windows on its online store once those are gone, though it will continue to offer customer support for existing device owners. Interestingly, the Nexus One will still be offered through carrier partners overseas, including Vodafone in Europe, KT in Korea, and “possibly others based on local market conditions.”

Kudos to Google for bowing to the inevitable. Google Mobile chief Andy Rubin can now claim partial victory, saying that the Nexus One accomplished its original goal as a prototype to demonstrate what the Android mobile OS is capable of – although most observers would point out that, in fact, that’s exactly what the N1 did not do.

It’s interesting to me, though, that the Nexus One’s out-with-a-whimper demise coincided with two other pieces of news:

 AT&T released its new Samsung smartphone, based on the Android OS from Google and called the Captivate. The Captivate features a 4-inch touchscreen, HD video-recording capabilities, Microsoft Direct Push e-mail, and the ability to use voice and data simultaneously. Provided by the exclusive iPhone carrier in North America, the Captivate underscores Google’s triumph in the mobile operating system space as well as its epic failure in the handset business.
 Wall Street analysts began calling on Google to unload some of the mountain of cash it’s sitting on, preferably in a stock buyback.

Google now has around $30 billion in cash reserves, which “represents 19% of its market capitalization,” wrote Benchmark Capital analyst Clayton Moran in a research note, as quoted on Tech Trader Daily. “It has yet to show how maintaining such a large cash position benefits the company. Acquisitions have been a few billion dollars or less and future acquisitions are unlikely to be larger.”

A stock repurchase would signal confidence in the company’s future, not to mention pleasing Google shareholders (whose stock would automatically go up in value). What else the world’s leading Web company might do with a bank account the size of the GDP of a medium-sized African nation – besides launching another ill-fated foray into the mobile handset business – is a matter of speculation. Maybe revolutionize the power grid and save the world. But I’ll bet that Google, like the star-child in 2001: A Space Odyssey, will think of something.