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Google Nexus One phone sold directly, partly unlocked on carrier networks

Google unveiled Tuesday afternoon its Nexus One smartphone, a wireless device meant to compete with Apple's iPhone that will initially be partnered with T-Mobile's wireless data network. In the spring of this year, it will be also available on Verizon Wireless in the U.S. and Vodafone in Europe.

The search giant designed the phone with hardware maker HTC and will sell the phone directly as a partly unlocked device. What that means is that it won't be tied down to one particular carrier on the GSM network standard (T-Mobile, AT&T), shifting the cellphone business model to one that is more similar to that of cellphone buyers in Europe. But when asked whether it will also be unlocked on CDMA (Verizon Wireless, Sprint Nextel), Google representatives said it will be partnered with Verizon Wireless.

By selling the phone at least partly unlocked and on two network standards, it will stand in direct competition to Apple's iPhone, which runs exclusively on AT&T.

About 33 million iPhones have been sold since the phone's launch in 2007, and it has propelled the use of Internet services over mobile devices. Apple tightly controls its applications store, iTunes, acting as gatekeeper for software allowed to run on the cellphone.

Google said it will sell the Nexus One directly through its Web site without any service plans with a particular carrier for $529. Or it will also help set up services for customers on T-Mobile, who will be able to get the phone for $179. It will be available on Verizon Wireless this spring. Google said it will said it will sell other phones in the future and hopes to partner with service providers to make the phone work on additional networks. Federal regulators are reviewing competition in the wireless industry and weighing whether exclusive partnership between carriers and handset makers hurts competition and constrains consumers.

In a press conference Tuesday after unveiling the phone, Google said that by selling it directly over the Web, the company will reduce the "inefficiencies" of how cellphones are sold and marketed today. Carriers pay for expensive television and print advertising campaigns and those costs trickle down to higher costs for phones and service plans, Google said.

The phone will be based on Google's Android operating system, with several applications created by the search giant such as YouTube and Google Earth. The company said it is no thicker than a No. 2 pencil and no heavier than a Swiss Army knife keychain.

Google's push into mobile technology is largely aimed at extending its Internet search advertising business onto wireless devices. The company said that, over the past year, search queries over Android mobile devices increased fivefold.

By Cecilia Kang  |  January 5, 2010; 3:32 PM ET
 
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