Google Nexus One Launch: Terrific HTC Phone,
Only Available Online

| Jan 5, 2010 | Mobile Devices | Show Update

| Analyst: Avi Greengart

Current Perspective: Slightly Positive
Vendor Importance: Low
Market Impact: Moderate

Event Summary

January 5, 2010 – Google is launching the Nexus One, a phone designed and manufactured by HTC and the first device to feature Android 2.1. The Nexus One has a 3.7” 800x480 touchscreen, a 1 GHz Qualcomm Snapdragon processor and a 5 MP camera. It will be exclusively available direct from Google online at google.com/phone. The Nexus One costs $179 with a two year T-Mobile contract or $529 unlocked. It is available immediately for T-Mobile USA with versions for Verizon Wireless and Vodafone expected in the spring.

Analytical Summary

• Current Perspective: Slightly positive on Google’s Nexus One, as the phone is technically advanced and well priced ($179 with contract; $529 unlocked, contract-free). While the Android 2.1 software on the Nexus One is not all that different from Android 2.0 (and 2.1 will be coming to existing Android phones shortly) the Nexus One is a huge step above anything else available at T-Mobile, and it edges out other flagship phones at other carriers in terms of raw performance. However, Google is limiting Nexus One distribution to its new online store. This is not a problem for early adopters who will seek out the phone, but regular consumers shop for phones in carrier retail stores. Regular consumers are also heavily influenced by carrier advertising, and if Google does not advertise the Nexus One - and it said during the press conference that it won't - most consumers won't know that it exists.

• Vendor Importance: Low to Google’s mobile business, because Android was picking up steam even without a Google-branded phone sold through its own online retail store. Google doesn’t make money on Android – or even Android hardware such as the Nexus One. Google clearly would like to disintermediate the carriers if possible, but mainly to reduce their influence on hardware and software design decisions, not to make money at retail. Android 2.1 is not a huge upgrade over Android 2.0 and Google took great pains at the launch event to stress that it is not competing with its licensees.

• Market Impact: Moderate because, let’s face it, anything Google does is going to have some impact. It’s Google, but once early adopter demand has been satisfied, the Nexus One will be subject to regular market dynamics, and Google may have to advertise the phone if it wants volume sales. Google could also drive traffic to its store with a simple text link on its home page. Long term, having a retail store could give Google flexibility to drive sales of all sorts of ancillary products.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

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