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January 4, 2010

Google is expected to ring in the new year by unveiling its own smartphone, the Nexus One, in a bid to expand its powerful web brand in the booming mobile arena.

The internet search and advertising giant has already gained a foothold in the market with its Android mobile operating system, featured in a number of phones starting with HTC`s Dream in 2008 and more recently with the Droid from Motorola, which is only available in the US.

But the Nexus One, designed by Taiwanese handset maker HTC, represents a significant departure in that Google is expected to sell the Google-branded phone directly to consumers who will not be tied to any one telecom carrier.

Apple`s popular iPhone, for example, is available exclusively in the United States through AT&T, but buyers of the "Google phone" will reportedly have their choice of wireless carriers.

Technology blog Gizmodo, citing leaked documents, said the Nexus One would cost $US530 ($A594) "unlocked" - meaning it isn`t tied to a specific carrier - or $US180 ($A202) with a two-year service agreement with T-Mobile, a subsidiary of Germany`s Deutsche Telekom AG.

Google has been coy about any plans to jump headfirst into the fast-growing smartphone market, dropping hints but not confirming its intentions outright.

Agence France-Presse and other media outlets have been invited to a press event on Tuesday at Google headquarters in Mountain View, California, billed only as an "Android press gathering".

"With the launch of the first Android-powered device just over a year ago, we`ve seen how a powerful, open platform can spur mobile product innovation," the invitation said. "And this is just the beginning of what`s possible."

Google provided no further details about the event, whose timing appears to be an attempt to upstage the Consumer Electronics Show, the annual technology extravaganza which opens in Las Vegas on January 7.

Among the hints dropped by Google was a blog post last month in which the company said employees were testing a mobile product internally in an exercise known in the industry as "dogfooding".

Google`s plunge into the smartphone market has drawn a mixed reaction.

"It looks like Google is moving to see if they can do the Apple thing," said analyst Rob Enderle, of Enderle Group in Silicon Valley, in a reference to the iPhone, which has enjoyed phenomenal success since it was introduced in 2007.

Pointing to Google`s $US750 million ($A840 million) acquisition of mobile advertising company AdMob in November, a number of analysts said Google hopes to replicate its web advertising success in the mobile space.

Not all are convinced by the wisdom of the move. "For Google to go into the business of selling phones just doesn`t make a whole lot of sense," Gartner analyst Van Baker said.

"Just coming out with a high-end phone really doesn`t buy you much," Baker said. "You`d be hard pressed to come up with enough revenue from pushing ads to pay for the phone service."

Ovum research fellow Jonathan Yarmis said Google will have to walk a fine line between marketing its own smartphone and being a supportive partner for the growing number of firms making their own handsets based on Android.

Although Android`s share of the US smartphone market is relatively small, it has doubled in the past year to 3.5 per cent in October, according to comScore, and Gartner predicts Android-based smartphones will capture 14 per cent of the global market by the year 2012.

AFP

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