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Google Launches Nexus One, Shakes Up Delivery Models

Google Inc. is taking a page from Apple Inc., launching its own branded mobile phone this week – the first of many, apparently. But it’s also shaking up the accepted mobile delivery model by launching its own consumer electronics-type storefront for the gadget, in theory wresting away control from the carriers.

Google execs were quick to point out at Tuesday’s launch event that Google did not design the phone – HTC did. It is instead, it said, acting as a merchandising agent with a new online channel for buying Android-based handsets using a Google Checkout account. The Nexus One is the first to be marketed this way, and it will soon be joined by other phones from other manufacturers, like Motorola Inc.

Unlike the Apple Store’s domestic AT&T Inc. exclusive with the iPhone, Google’s Web-based storefront offers consumers the HTC-built Nexus One with or without carrier service. An unlocked phone will cost $529, but it’s also available with a T-Mobile USA contract for $179. Google’s further staying true to its open access mantra by making it available with either Verizon Wireless or Vodafone plc this spring, with other carriers on the way. The unlocked version can run on any GSM network, but because of the frequencies supported within the phone, on AT&T it will run on EDGE, not 3G.

While taking the mobile phone business out of the exclusive realm and into more of an open consumer marketplace offers significant changes for the carrier delivery model – and perceived ownership of the customer – the import for Google is also worth noting. It’s not about the hardware margin, executives explained, meaning that the objective is not to take on giants like Apple or Microsoft in the form factor game. That dovetails with Google’s insistence that it is leaving that to the manufacturers. The gadget – and those to follow – is rather a Trojan horse of sorts: Google’s No. 1 priority is to get people online, wherever they are, which of course would translate to more online advertising and Web app and search revenue for the Internet juggernaut.

Further true to the Google roots, and in sharp contrast to the blitz from Verizon around the Motorola Droid, the marketing for the Nexus One will be done solely online, and will leverage the Android market.

Executives called the phone a “superphone,” explaining it was not a call-out to the iPhone, but rather to consumers, who need to realize the bounty of choice that they have, and will continue to have, thanks to the Android model and other open approaches. To that point, many of the Nexus One features are a product of the software under the hood, Android OS 2.1. The operating system will go open-source within days, meaning the upgrade will be available to all manufacturers.

And as for those features, the gadget offers several software goodies, like a “flyaround” app that leverages 3D and Google Earth, voice recognition/dictation/search for every text field, auto-sync of pictures to Picasa, interactive wallpapers (streams ripple when touched), and built-in Google apps like maps and mail. Widgets can be scrolled through with a track ball type-touch interface.

On the hardware side, the device runs on the fast 1GHz Qualcomm Snapdragon processor. It has a touchscreen-only keyboard on its 3.7-inch AMOLED display, Wi-Fi, Stereo Bluetooth, GPS, an accelerometer, a compass and light and proximity detectors.

The announcement is one bookend to the Consumer Electronics Show happening this week in Las Vegas. The show officially opens Wednesday evening and is expected to showcase a wide range of connected devices and handhelds, making Google’s announcement an apropos – if unaffiliated – lead-in.

It’s a good month for mobile devices. The show’s other bookend is an Apple Inc. event on Jan. 26 in San Francisco, during which the Apple Tablet (widely rumored to be dubbed the ‘iSlate’) might just make an appearance.

The device, with its 10-inch screen, is being characterized variously as a Kindle killer, an iPod Touch on steroids, a netbook blocker, a legitimizing of the Apple ethos for business users, and Steve Jobs’ favorite project. It could be all or none of these things, but the evidence suggests we are tantalizingly close to finding out.


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