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Will the Google Nexus One take a bite of Apple?

Google hopes the Nexus One will be a game-changer that gives its Android operating system a boost in competition against rivals such as Apple?s iPhone and Research In Motion?s BlackBerry.

Timed to coincide with CES, Google announced the launch of the handset today after Mobile Marketer went to press. Designed by handset manufacturer HTC using the open-source Android 2.1 OS, Google Nexus One will be available unlocked for use on any GSM carrier for $530 or for the subsidized price of $180 as part of a two-year contract with T-Mobile USA that includes an $80 monthly data plan.

?Google will offer the phone itself unlocked, in which case it won?t be a significant competition for other Android devices on the market, and T-Mobile will likely offer it as a subsidized device, which is another Android device in T-Mobile?s portfolio,? said Ross Rubin, director of industry analysis at the NPD Group, Port Washington, NY. ?The branding could represent a step up from the ?with Google? branding we?ve seen up to this point.

?It will have a faster processor, larger screen and a better form factor than previous Android devices, resetting the baseline for what we can expect from Android experiences moving forward,? he said. ?There could also be some special service considerations.

?We?ll see if it?s a state of the art Android device or if there?s something special, which would explain why Google is branding it in the way that they are."

Android on the rise
According to NPD's latest information, in the first two months of the fourth quarter of 2009, the Android operating system quadrupled its market share from the third quarter and moved into the third-ranked slot behind RIM and Apple.

Android's growing handset options and presence at three of the four major carriers, especially Verizon Wireless, has enabled it to come within striking distance of the iPhone OS.

Android has taken share from all of its major rivals, but especially from Microsoft?s Windows Mobile, which has seen its share fall significantly in the fourth quarter of 2009, according to NPD.

The following is the latest ranking from NPD on consumer purchases of Android devices representing October/November 2009:

1. Motorola Droid A855
2. T-Mobile myTouch3G
3. HTC Hero
4. Motorola Cliq
5. T-Mobile G1 with Google

In addition to competing with other operating systems, Google is now competing with handset manufacturers, including ones that have already released Android-based smartphones.

?Even though Android is open-source software and it is freely licensable, what about Motorola, which just released the Droid?? Mr. Rubin said. ?Google is one-upping them in some respects, but those are the risks you take when you license an operating system , you?ll have competitors that license the operating system and it could be anyone.

?Google has a bit of a dilemma, because it wants the operating system to be open source and have a thousand handsets bloom, but it clearly wants to put its signature on it and see level of polish you see on a vertically integrated device such as the BlackBerry, iPhone or Palm Pre,? he said.

?This is the company?s most aggressive attempt to date to find what a Google Wireless experience might be using the latest version of Android.?

Google may have to put significant marketing muscle behind the Nexus One for it to be a success, given the T-Mobile is the No. 4 carrier in the U.S. based on number of subscribers.

?As we?ve seen with the Droid, the success of these handsets depends very much upon which carriers are offering them, how much they?re promoting them and how much the price is,? Mr. Rubin said.

?Being on T-Mobile?s network, given the size of that carrier, it will be hard to reach the volume of, say, a BlackBerry Curve, which is on all four of the tier-one networks, or the iPhone, which is on the second-largest carrier,? he said. ?T-Mobile has done well with the Android handsets, but it could be seeing some dilution as their portfolio expands to four or five smartphones.

?While its overall piece of the Android market share is growing, the carrier is not necessarily pushing one handset, but the Nexus One could be a candidate for its next signature device.?