will perhaps be remembered as the day on which the smartphone evolved into what Google is now calling the superphone! On Tuesday, Google unveiled the worst kept secret on Internet: a brand new cell phone, designed by Google and manufactured by HTC, called Nexus One.
Nexus One represents the next frontier in the company's $20bn core business of selling advertising through search and is its first direct foray into the handset market. It runs on the Web giant's Android OS (joining 20 other devices) and has put Google on a collision course with Apple's iPhone, RIM's Blackberry and various other smartphones.
Currently, it is only available in the US but will be sold shortly in Europe, Hong Kong and Singapore. The wait could be a little longer for Indian enthusiasts.
Due to meltdown, the overall sales for mobile phones remained flat in Q3 2009. However, smartphone sales continued to grow by nearly 15% as they have, ever since the market was redefined by Apple's iPhone. As per estimates, smartphones have now become the new laptops and will capture 37% of the global market by 2014, a leap from 16% in 2009.
Google's emergence as a retailer is an escalation in the budding power struggle between Apple and Google, as both view the mobile market as a key to their continued success.
Analysts are expecting that Nexus One will lead to an annual 100% growth in Google's mobile ad revenue worth $75 million, because of better control over the Android and mobile search environment.
Gradually, all the market players will be willing to join hands with Google for the sake of market efficiencies. However, in order to truly transform the mobile market and achieve its ultimate goal of selling maximum ads, Google will have to find ways to innovate. It will have to play around with its marketing and manufacturing strategies.
It can bring out a smartphone-starter plan, offering a cheaper data plan to attract the I-don't-need-a-smartphone crowd. Google should mainly aim to provide low-cost, uncontrolled devices with low-cost connections, as this would mean more people using its software and seeing its ads, even if that phone is made by Motorola, Nokia or even Apple.
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