nexus one The gadget world has been ablaze over the last few days over the possibility of Google releasing their own-branded smartphone. Yes we’ve heard this before and as before, the current buzz is being spurred on by a new Google Android handset being shown off by Google employees.  Provided to all Google employees on Friday, the “Nexus One” smartphone has left media outlets debating left and right about theories, wisdoms, and possibilities of the new handset. Some of the questions raised included:

  • Is Google finally releasing their own branded handset to compete directly with the Apple iPhone?
  • Is this simply the next generation flagship Google phone like the previous models shown off by Google (think G1, Droid etc)?
  • If Google does release their own branded handset, what will this mean to other hardware vendors who manufacture Android handsets? Will third party vendors get annoyed at Google for doing this (think Zune vs Windows Mobile)
  • Will Google work with carriers or say “F-U” to the carriers and go it alone?

So many questions and so few answers. About the only solid things we do know is:

1) we know what the handset looks like thanks to tons of pictures floating all over the net submitted by Google employees and

2) a blog post over at the Official Google Mobile Blog stating:

“We recently came up with the concept of a mobile lab, which is a device that combines innovative hardware from a partner with software that runs on Android to experiment with new mobile features and capabilities, and we shared this device with Google employees across the globe. This means they get to test out a new technology and help improve it.”

Yeah this could mean a lot of things obviously. Is Google simply having the entire company beta test Android 2.1? Is Google just showing off a new reference design for the dream Android handset? Is there a new service in Android 2,1 that they want everyone to play with before it goes public? Are they really contemplating a Google-branded mobile phone?

Over at PC Magazine, Sascha Segan thinks that the media has it all wrong with the Nexus One handset. Reasoning? Google’s done this before – showing off a handset that would eventually make its way to some carrier (again, think G1, myTouch, and the Droid). Google has a habit of showing off their latest flagship Android handset from a variety of vendors (usually HTC though) and referencing it as a “Google Phone”. Could this be the same thing happening all over again? Perhaps.

But then, later on today, Reuters ran an article (courtesy of PC Magazine again) stating that an anonymous source had informed them Google was planning to indeed sell two versions of a Google-branded handset – one with a service contract with T-Mobile USA and one that will be unlocked. According to the article, the phone could be available as soon as January 5th and would be available directly from the Google website. The Jan 5th is particularly interesting because it would place the unveiling right before the start of CES – essentially stealing some thunder on the eve of the largest CE conference.

Given the possibility that a Google-branded phone might very well be real (assuming you believe the anonymous sources), one has to wonder what this means for third party Android manufacturers. Case in point – Samsung and Motorola. Not only do they have to compete against the Apple iPhone, the BlackBerry, Windows Mobile, and other Android vendors, they now have to compete directly against Google itself. This was one of the issues Microsoft ran into when they introduced the Zune thereby alienating vendors away from the Portable Media Center platform (Windows Mobile). Will vendors think twice about releasing an Android handset knowing full well that they will need to compete against Google? That’s a very real possibility.

But another question remains: if Google takes this road, can they successfully reach the consumer with their own branded phone? Will an unlocked handset translate to increased sales for the Google Nexus One or will it simply steal market share away from other Android handset manufacturers?

Remember everyone – an unlocked mobile phone is expensive. It’s not tied to a specific carrier which means there are no carrier subsidization in effect here. When you purchase a new handset from a carrier (along with a new 2 yr agreement), the carrier eats up a good percentage of the handset price in the hopes that it will make money via services from you the consumer(aka the monthly voice, text, and data plans). If Google sells an unlocked phone, it will undoubtedly be expensive unless Google takes the unusual route of subsidizing the handset themselves in the hopes that they will make the money back from increased usage of Google services.

If a Google-branded phone does become a reality it does say one thing about the company and the mobile OS. Google finally feels it needs to take matters into its own hands when it comes to the mobile space. Case in point – the Apple iPhone.

The beauty of the iPhone is – limited choice; consistent user experience. There’s essentially only one model to choose from (good or bad that might be); everyone gets a consistent user experience because one vendor controls both the hardware and software. Yes, the iPhone is merely an extension of Apple’s existing hardware/software strategy on the computing front and guess what? it works.

However, unlike Apple, Google initially took a Microsoft-like approach with Android. License out the OS and let third party manufacturers innovate. The result – increased market share by growing vendor acceptance of the OS (and acceptance by consumers of course). However, Android uptake has been somewhat slow until this year – and even then Android sales lag behind Apple iPhone sales.

So there you have it. Nothing firm; plenty of questions; lots of rumors; a multitude of pictures.. and also plenty of folks who are saying “So What?”

I’m a proud user of the Apple iPhone.. what I want is NOT a replacement for the iPhone. What I want is a different carrier.. say Verizon Wireless. But that’s just me…

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