Is Nexus One the next big one?

Nexus One is available to buy on the search engine and follows the release of the HTC G1 handset in Christmas 2008, which was sold exclusively through T-Mobile and was branded “powered by Google”. Vodafone will offer UK contracts, or one can buy the handset without a sim card.

The company says the goal of Google’s new consumer channel is to provide an efficient way to connect Google’s online users with selected Android phones.

But has Google managed to find something that will help it compete with its main rivals Microsoft and Apple in the mobile world? Mobile experts think not.

According to Andy Rubin, senior director of mobile platforms at Google, Android is “the next most important platform in the world” and will “revolutionise” the way mobiles work.

Since Android’s launch, 20 handsets have been released using the system worldwide and it has just more than a 25% share in the smartphone market.

Avi Greengart, an analyst with Current Analysis, says that although there is interest in Android, the iPhone has dominated because of its ability to multi-task – a functionality Google cannot compete with,

“Android has been gaining pace and Google is increasing mobile traffic as a result. But if you put the Nexus One against the iPhone, they just don’t compare – at least not on what is being touted right now. It will be interesting to see how they do in the sales rush. Google will surely be looking to do better than its G1 did,” he says.

Curiously Google has signed Vodafone up to be its first UK partner. The operator is already well under way with its promotion for the iPhone launch on the network next week and recently dropped plans to sell Sony Ericsson’s X2 smartphone handset.

Sarah Cakebread, a consultant at MobiBrands, says Google will have to ensure it gets a similar marketing push to Chrome to be a successful launch.

“I’d be surprised if Vodafone did give Nexus One a lot of attention when the iPhone is in fact its bigger and better option. I expect that Google will look to promote the handset using PR and across its website as much as possible for now. If they extend the brand, like they have done with Chrome, only then will we possibly see an extensive ad campaign.”

However, according to Datamonitor, the key aspect of this launch was not the device itself.

“It’s more about Google’s entry as an online retailer of phones. The Nexus One may not be a game-changer in terms of technology or pricing, but it does reinforce Google’s ambition to become the first managed device platform (MDP) vendor,” the analysts suggest.

They add that Nexus One is an achievement for Google because it has control of the complete end-to-end user experience of the handset, from procurement to the delivery of web services to the device.

“We believe that MDPs will define the new high end of devices over the next five years. As smartphones are pushed further into the mass market, the important distinction of a phone will not be smart or not smart but managed or unmanaged,” Datamonitor predicts.

Questions also remain over Android and Nexus One’s late entry into an already crowded market, and barriers such as consumer loyalties to existing platforms.

Kevin Burden, director of technology consultancy ABI Research, says: “If Android is going to pay off for Google and OHA, subscribers will need to start buying smartphones without fully realising what they just purchased.”

For Google to succeed in selling phones under its name, it must rely on the strength and reputation of the Google brand to appeal to both business and consumers. Selling the phone itself could be a more risky move, however. Only recently Nokia closed several stores worldwide in recognition of the fact that customers wanted price deals and not just handsets.

Strategy Analytics executive director Chris Ambrosio says: “Google has the brand power to make a big impact at launch. It should be able to compete with other competitors in the market such as Microsoft and Symbian, as long as it shows real worth to users.”

In marketing terms, the launch of Android may also open a platform which brands have been hesitant to exploit. Last year, a survey by operator O2 predicted that spend in mobile marketing – ads designed for mobile platforms – was set to rise 150% in five years.

Daniel Rosen, managing director of AKQA Mobile, says: “The Android platform presents such a mixed opportunity. The cost and time to deploy applications is greatly reduced, which helps to justify platform development, but ‘reach’ is a key barometer if it is to compete with the likes of Apple and Symbian.”

Few doubt Google aims to shake up the mobile market, and with partners including T-Mobile and Motorola it seems to have made a good start. Bringing the success of its search engine to the mobile industry, however, will be a huge challenge.

See for yourselves and decide if the superphone generation really is on the way.