Google unveils Nexus One phone

Google Inc. announced details of its Nexus One phone on Tuesday, raising the stakes in the internet search leader's bid to gain more control over how people surf the web while on the go.

At Google's headquarters in Mountain View, Calif. on Tuesday, Google said the Nexus One will run on its Android 2.1 operating system, the same one installed on Motorola's Droid smartphone, which was unveiled in November.

The company announced an unlocked version of the phone that can be taken to any carrier will be sold for $529 US. But U.S. carrier T-Mobile will sell the phone for $179 US if customers sign up for a multi-year contract. Rival carrier Verizon Wireless will begin selling the device in the spring, although it has yet to reveal its pricing package.

Though initially targeted at the key U.S. market, the device will ship to countries outside the U.S. immediately, including the United Kingdom, Hong Kong and Singapore.

Thus far, Google will not ship the device to Canada, Google spokesperson Wendy Rozeluk said. But any SIM card on a GSM network would theoretically be able to work with the phone, and Canada has numerous carriers that have such a network.

Among other features, the phone offers voice-activated searching, and a modern voice-recognition technology that allows users to type emails by dictation.

The Android operating system was designed to make it easier to interact on a mobile phone with websites and services, including Google's, while providing a platform to run applications developed by outside programmers.

The applications don't have to go through an extensive review before they can be distributed to Android-powered devices, a contrast from the control that Apple Inc. holds on its hot-selling iPhone.

Most phones tethered to carriers

Until now, Google has been content to let other companies design the devices relying on Android. And those devices thus far have largely been distributed like most other mobile phones, tethered to major wireless carriers that typically require buyers to lock into multi-year contracts in return for discounts on the handsets.

But with the Nexus One, Google will sell it directly to consumers over the web, leaving it up to the buyers to pick their own carriers. That could open new possibilities while igniting new tensions in the mobile phone market.

Just how much Nexus One shakes things up hinges on reaction to the phone's price.

Most smartphones designed for web access sell for $50 to $200 US, thanks to subsidies provided by wireless carriers in return for commitments to service plans that cost $800 to $1,000 a year.

Without the financial aid, the phones could be in a range that most consumers have been unwilling to pay, especially in a shaky economy.

'If enough customers want this phone, the carriers will have no choice but to follow.' — Rob Enderle, tech analyst

"If enough customers want this phone, the carriers will have no choice but to follow," technology analyst Rob Enderle predicted.

A smartphone that empowers consumers to choose from a variety of carriers could pose a threat to the iPhone, which is tied exclusively to AT&T in the United States. With competition between the two companies heating up, Google CEO Eric Schmidt resigned from Apple's board five months ago.

Selling its own phone also could foster more resentment toward Google among the business partners that have been backing Android as a viable alternative to the mobile operating systems made by Apple, BlackBerry maker Research In Motion Ltd. and Microsoft Corp.

Verizon, for instance, has raised consumer awareness about Android during the past two months by bankrolling a marketing blitz for the Droid phone made by Motorola Inc.