Goldman Sachs has slashed its sales estimate for Google’s Nexus One after limited marketing, poor customer service and online-only availability of the device cut into sales.

The investment firm previously forecast that Google would sell 3.5 million of the Android-based devices in 2010 but was disappointed by initial sales figures “possibly due to limited marketing and customer service challenges.” Goldman Sachs now puts full-year sales estimates of the device at just 1 million, less than a third of its prior estimate.

Looking ahead, Goldman Sachs said that if Google rolls out a second version of the device with better marketing and in-store availability, the company could sell 2 million of the devices in 2011.