Nexus One Makers Soothe 'Growing Pains'

Google, HTC, and T-Mobile are climbing a steep learning curve in handling customer service for the new phone based on the Android operating system

By Olga Kharif

Like many technophiles who were among the first to snap up the new Nexus One smartphone, Rob O'Connor has had to put up with an inconvenience or two. The Aspen (Colo.) information technology executive ordered his new Google (GOOG) gadget on Jan. 5—the same day it was unveiled to the public—and has been forced to manually reconfigure settings for the device to connect to T-Mobile's faster, 3G network in more locations. The Nexus One often does not discover that network and, as a consequence, users surf the Web at slower speeds—a major source of frustration for buyers posting complaints online.

"It's definitely annoying," O'Connor says. "If it lasts a long time, I would be aggravated. I am willing to give them a week or two [to work out the issues]." The phone's manufacturer, HTC (2498:TT), has acknowledged a 3G connection problem and says it is working to resolve the matter.

O'Connor's is just one of many complaints Nexus One owners have logged in recent days. Gripes range from slow connection speed to confusing customer service and the unwillingness of T-Mobile USA to lower the price of the device for existing customers. Customers new to T-Mobile USA can buy the Nexus One for $179 with a new two-year contract, but everyone else has to shell out $529. Another complaint: Google charges customers who leave T-Mobile more than two weeks but less than 120 days into their contract an extra $350—a hefty fee that comes on top of the usual charge T-Mobile assesses whenever a customer bails out of a contract early.

Some Buyer's Remorse

Google, HTC, and T-Mobile USA will have to work fast to resolve the ordering-process, technical, and support issues raised by the first crop of buyers of their new device. "I'm a big Google fan but I'm really regretting my impulse buy," a commenter called Midgetall posted on Jan. 11 on Google's Mobile site. "With the hassle, hidden costs and complete lack of support I'm really regretting it. Is it just me or do you feel like you have been let down?"

Nexus One is the first gadget to be sold exclusively through Google's new online phone store instead of through carriers or brick-and-mortar and online retailers like Best Buy (BBY). That means customers can't walk into a retail store for help; instead they must rely on telephone or e-mail support. "This is a new business model," says Keith Nowak, an HTC spokesman. "And we've seen some growing pains about who deals with which issue."

To reduce response times to customer queries, the Nexus One partners have worked to better subdivide their support duties in the past several days. HTC has assumed hardware questions, with T-Mobile fielding calling-plan issues. Google functions as the main online landing page that directs consumers to one or the other partner. HTC transfers callers who have questions about T-Mobile's calling plans directly to the carrier, so they don't have to redial, Nowak says. The device will be available on Verizon Wireless (VZ, VOD) later this year, and it is also available without a contract.

HTC is also investigating the 3G connectivity issues, raised in 641 posts on the Nexus One online forum so far. "We are aware of these concerns, and are addressing them now," Nowak says. "We have a lot of manpower working on this. We hope to have an answer pretty soon."

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