Not many surprises here today at Google’s headquarters, or even celebrity appearances. As speculated, it is launching the Nexus One, which is the latest Android handset that it will be selling directly to consumers through a newly launched web site at Google.com/phone starting today.
Google (NSDQ: GOOG) is calling the device, built by HTC, a “superphone,” and as that name would imply, it does sport a lot of the latest hardware and has some software surprises, but it’s not revolutionary. That said, it’s a very solid device that provides a nice competitive offering to the iPhone.
The phone will be sold by Google online for $179 if customers sign up for a contract with T-Mobile USA. If they buy it unlocked, the device will cost $529. The online store is part of a new Google program that will start retailing certain high-profile devices. In a Q&A following the initial news, Motorola’s Co-CEO Sanjay Jha dismissed concerns that Google’s retail presence is a threat to his business, and said it actually expands the potential sales channels that can “take our innovations to consumers as fast as we can.”
While the announcements today seem small in scale for a company that has promised to completely revolutionize the industry, Google’s Andy Rubin promised that more is coming. He would not comment specifically on questions about whether ad-supported phones were coming, or radically different business models, but added: “Before you can revolutionize the world you have to have a mechanism in place in which you are selling products. Let’s get an online store going, and let’s get a best-in-class store, and then enhance it.”
The store will eventually offer additional handset models, but not everything, which would be difficult and cluttered given that in the last year alone, Google has gone from one to 20 different handset models. The Nexus One will initially work best on the T-Mobile USA network, but if consumers wish, they can run it on the slower AT&T (NYSE: T) EDGE network. In the Spring, Google says the phone will be offered by Verizon Wireless in the U.S. and Vodafone (NYSE: VOD) abroad. The Google phone store is also being tested in the UK, Singapore and Hong Kong.
The hour long presentation included highlighting many of the phone’s details. It has one of the fastest speed processors, a 3.7 inch screen, and a multi-colored trackball that changes colors depending on which apps you are running, such as Bluetooth. The phone runs Android 2.1, the latest software version, which means that it has turn-by-turn navigation. New to the Nexus One is a noise cancellation technology for eliminating background noise. Google has also developed a new news and weather app, a Google Earth app, and has some spiffy new wallpapers, which they say are “live.” The background acts like a pool of water, when leaves fall into the background, or a person touches the phone, the water ripples. In addition, everything is voice-enabled, meaning you can speak to update your Facebook status, your Twitter feed, or even an email. In a live demo, the phone flawlessly wrote: “Check this new voice keyboard! I just hope this demo works.” The UI is super snappy and while Wi-Fi and GPS was running in the background during most of the demo, the battery level never faded (how realistic this will be over time, who knows?).
So, if Google is also becoming a retailer with the launch of this phone, does that mean it’s now hoping to make revenues off of hardware? Rubin says, no. While there are inherently revenues to be made in hardware, it’s more about increasing search revenues. “Our primary business is advertising. This phone from a performance perspective is like your laptop four to five years ago, It’s a great way to access the internet, and along with that comes our normal business model of advertising. This is the next front of core business.” Mario Queiroz, Google’s VP of product management, who presented most of the information today, provided some stats on how the mobile-search business is going. He said during the past year or so mobile searches to Google have increased by 5 times, and that Android users users in general search 30 times more than users on feature phones.
When Google handed out a phone at an all-hands meeting in December last night it gave all of its employees a cellphone, everyone was quick to assume this was the coming of the Google Phone—even though Google had said in the past that it wasn’t interested in doing its own phone. When asked about this, Rubin was coy. “I’m very precise when I talk. I said Google will not build hardware…We are internet and software guys and we know how to do that quite well and I think we’ve contributed back to the ecosystem.”
Related