On the day the 796 experience stores opened around the world, almost 150 of them sold out of their inventory. Store employees had to urgently transfer stock from other locations to meet the demand. The stores were practically overrun with people eager to get their hands on the phones, just like a mad rush.
The demand was so high that scalpers were reselling the Google phone online for more than $750! At this rate, it wouldn't be surprising if the price doubled. The fact that people were still willing to pay that much shows just how groundbreaking this smartphone, which Mavi invested in developing, was.
A day later, executives from Nokia and Motorola finally managed to get their hands on a couple of the Google smartphones from other cities. They held a meeting to analyze and figure out why the phone's launch was such a massive success.
The phone engineers from both companies spent a whole night studying the Google phone. At the meeting, they summarized its features. "Everyone, you can see that the black phone I'm holding is the first-generation Google smartphone. It's much thinner than other phones on the market. Also, it doesn't have an 18-button keypad because it uses touchscreen technology."
As soon as the engineer said "touchscreen technology," the executives around the conference table finally showed a glimmer of understanding.
"No wonder it doesn't have a keypad; it's a touchscreen. What about its performance? How does it compare to the Nokia 7650?" someone asked. Since both were considered smartphones, they were naturally being compared.
"The difference... to be honest, it's pretty huge," the engineer said, sounding a little hesitant. Compared to the Nokia 7650, which was a "dumb phone" with only 8MB of memory and just 4MB of usable space, the first-generation Google smartphone's performance was in a completely different league. It came in two memory versions: a 2GB model for $550 and a 4GB model for $688. The reason it wasn't 4GB and 8GB was that microprocessor technology in 2002 wasn't mature enough to make a memory chip larger than 4GB.
"The Google smartphone's memory capacity is... well, it's about 300 to over 500 times more than the Nokia's. Users can store all their favorite songs, videos, and photos on it. It's essentially a handheld computer that can make phone calls."
The more the engineers from both companies studied the Google phone, the more they realized its design and performance were absolutely revolutionary and unparalleled. As soon as their preliminary presentation was over, the Nokia and Motorola executives, including CEOs Davis and Mark, were completely stunned by the Google phone's massive memory and powerful features.
"Besides its function as a handheld computer, if you look at the back and front of the phone, you can see two circular holes that look like cameras. That's because it has a camera function, allowing users to take photos and record videos anytime, anywhere."
"In short, the first-generation Google smartphone is a super-smartphone that combines calling, photography, powerful storage, and software applications all in one. It completely revolutionizes people's traditional idea of what a phone is."
Listening to the engineers' explanations, the Nokia and Motorola executives finally understood where they had gone wrong. They also understood why Google dared to price the phone so high. The 4GB of memory was simply incredible.
"Let me ask you something: if our company wanted to develop a smartphone similar to Google's, how long would it take?" Motorola CEO Davis asked his subordinate, his expression serious.
They hadn't taken this seriously enough before, and now Google had caught them completely off guard. If the gap continued to widen, the entire Motorola empire could be brought down by Google in just a few years. The same would happen to Nokia; it was only a matter of time.
"In terms of time, since we're starting so late, it would probably take at least three years of research and development," the engineer said, sounding helpless. The Mavi Group had secretly developed an advanced smartphone while their company was still in a meeting asking how long it would take to catch up. By the time they finished developing their first smartphone three years from now, Google would likely have already released its second or even third generation!
The gap was an insurmountable chasm, a direct result of their strategic failure. To put it bluntly, the CEOs of both companies had failed to grasp the direction of the industry and were now three steps behind. How could they possibly catch up?
"Three years?" The Motorola CEO was deep in thought at the conference table. For the digital industry, let alone three years, even one year—or just six months—could bring about massive changes to the products on the market. This three-year timeline was a death sentence for Motorola.
Now he had only two paths to choose from. One was to imitate Google and quickly develop a Motorola smartphone, but they would have to avoid direct competition. For example, since Google was targeting the high-end market, Motorola could lower costs and take the low-end route. But even that was incredibly difficult.
The other path was to stick to their current plan and develop their existing resources to the fullest. They could try promotions, price wars, and focus on service quality to make up for the phone's technological disadvantages. Neither path was easy; both were extremely difficult problems to solve.
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While Motorola and Nokia were stuck in their dilemma, the man who started it all, Mavi, was just lazily waking up. The president of Google had already filled him in on the phone's massive success yesterday. Mavi had already been through this many times; something that was an incredible surprise to others was just what he had expected. His temperament had become much calmer, and he no longer got overly smug or startled.
"Chairman Mavi! I have some fantastic news! As of early this morning, we've sold 19,000 Google smartphones worldwide! Many stores sold out on the very first day, and the warehouse can't even keep up with the supply! At this rate, all 300,000 phones we prepared will be gone in less than three weeks," Google President Sergei said, astonished at how well the phone was selling.