• by Mark Walsh  @markfwal, March 12, 2010

With Goldman Sachs recently cutting its sales forecast for Google's Nexus One from 3.5 million to 1 million units in 2010, some are already calling the company's online-only model for the phone a bust.

With the breathless hype surrounding the phone's launch, you might've thought it would sell 50 million units the first week. But maybe Goldman's target of 3.5 million sold was too high to begin with considering the unorthodox approach Google took with the Nexus One, directly selling its own phone (or anything, for that matter) for the first time, unlocked and online-only.

And with an unsubsidized price of $529, did Goldman really think people were going to flock to the phone in droves, regardless of its strong reviews? And if it does sell 1 million this year, that still wouldn't be too shabby.

Depending on the time frame, "if Google can hit 1 million unit sales with an online-only retail model, I would consider that to be a rather significant success," said Avi Greengart, research director for consumer devices at Current Analysis.

Jumping into online retail, Google has had its share stumbles, including not initially offering customer phone support for the Nexus One and attaching early termination fees adding up to a whopping $550 for phones sold with plans from wireless partner T-Mobile. The company has since added phone support and cut its own ETF from $350 to $150, but it's still recovering from early missteps and learning a new business.

That's not to say Google can't take some of the advice Goldman offered in its report on the Nexus One, like also selling it offline via Verizon Wireless stores when the nation's No. 1 carrier begins providing service for the phone this spring. Boy Genius Report suggested some Verizon staff have already begun training to sell the Nexus One, but whether that will actually happen remains unclear.

It also start selling the phone at T-Mobile stores or through an electronics chain like Best Buy. After all, Apple doesn't limit itself to one distribution method for the iPhone, selling it directly online and through its retail stores as well as AT&T stores and big box stores.

Goldman also called for a bigger marketing push behind the Nexus One--to date, Google has only advertised the phone online via its own online properties, including the Google home page and its AdSense network. But it hasn't gone for the kind of splashy, cross-media campaign Verizon launched for the Android-based Droid. With its deep pockets, Google could certainly afford to fund a wider promotional effort for the Nexus One to go beyond the early-adopter crowd.

With its surprise Super Bowl ad this year touting search, Google showed it's not above indulging in the costliest TV advertising there is. If so, why not flex that marketing muscle for a business it's trying to break into instead of one it already owns?