The Google HTC Nexus One smartphone with Android 2.1 was unveiled in the US on Tuesday 5 January, 2010. It will initially ship in the US, UK, Germany, Hong Kong and Singapore. The HSUPA handset ticks most of the right technology boxes, including a 4-inch touchscreen, multi-tasking and a powerful 1GHz Qualcomm Snapdragon processor. The phone has a handy voice-recognition feature, which can be used for controlling text fields, and it will be a key differentiator. A user can quickly write SMS and email messages simply by speaking to the handset. Only time will tell just how accurate and reliable the voice-control solution actually is. Why has Google gotten into the handset business? Google wants to champion a flagship user-experience and limit fragmentation for Android, while simultaneously driving up its global user-base for future mobile advertising revenues.
Exhibit 1: Google Nexus One
Some downsides: first, the Nexus One lacks a hard QWERTY and multi-touch, which may be an issue for some segments. Second, the handset's style and design are a little ho-hum and me-too. Third, the retail pricing, at US$179 postpaid and US$529 prepaid unlocked, is not as competitive as some might have expected from a company that is often associated with super-low-cost business models. And fourth, the Nexus One is initially being launched with T Mobile, which may lack the marketing clout of its bigger US rivals such as AT&T.
An interesting development is the opening of a Google-hosted online store, at www.google.com/phone, which will offer an online retail channel through which consumers in the US can buy a prepaid or postpaid Nexus One. A customer must register on the site (useful for Google to control the end-user), choose a phone model, pick a data-plan from T Mobile, then Google will deliver the phone directly to their home. In effect, Google has become a handset distributor and retailer. This is unchartered territory, and it remains to be seen whether Google can compete effectively with the likes of Apple and Amazon. The announcement is certainly good news for the online handset distribution industry. Online handset distribution, via firms such as Amazon, currently accounts for 1 in 12 of all shipments worldwide. With Google's huge marketing clout and its heavily visited PC search engine, online handset distribution is going to see a major uplift in activity this year. Google just made online distribution a hotter topic for 2010.