After questions from the Federal Communications Commission, Google has lowered its early termination fees for its Nexus One from $350 to $150.
Although Google calls it an "equipment recovery fee" for the phone, customers who want to break their two-year contract will still have to pay an early termination fee of $200 to T-Mobile. The Nexus One costs $179 for those customers who sign up for a two-year plan with T-Mobile or $529 to purchase an "unlocked" phone available for any wireless network.
Aside from asking about how Google decides on fees, the FCC is also asking why customers have to pay fees to both companies.
Google said in a statement that it lowered the fee to benefit customers and that it continues to make no profit off of the Nexus One.
I think $350 to cancel or downgrade service within four months (except the 14-day trial period) is a lot. While around 80,000 units were sold in January, a respectable but not unusual amount ,especially for a new phone, some critics are thinking sales may be affected by the large early termination fees. Perhaps many consumers are preferring something less cutting edge but with a more palatable fee system.<
While the Nexus One has gotten some good reviews and is no doubt a decent gadget, it's by no means the only smartphone out there, and until Google figures out how to make a slightly more economical phone, some consumers will be scared off by its high cancellation fees. However, it's too bad a company like Google, founded on the principles of being a decent rather than evil corporation, needed the FCC to step in before it considered revising its fee structure.
Google lowers Nexus One ETFs By $200, but you'll still pay $350