Nexus One leads Google to new frontier

The hardware is not what is noteworthy about Google Inc.’s unveiling of its Nexus One high-end smart phone, rather it’s about the search engine mogul taking on the new role of managed device platform vendor, said one analyst.


The smart phone offering is not an earth-shattering addition to what’s already available on the high-end device market, but Google is taking a different approach to how it is offering the device by managing much more broadly the complete mobile user experience, said Adam Leach, U.K.-based devices practice lead with research firm Datamonitor.


The Nexus One “super phone” can be purchased online through a new Google Web page, using Google Checkout.


The Mountain View, Calif.-based company is not just playing the role of software provider as it did with the launch of the Android operating system, said Leach. Google is taking control of the end-to-end user experience from device procurement to delivering Web services, and is an approach that, he added, “creates customer relationships, delivers services, hardware and the whole package.”


Assuming the role of online phone retailer, Leach said will create a shift in the value chain and help Google “play a dominant role in the mind of the consumer,” said Leach.


Datamonitor believes managed device platforms will definitely be the distinguishing factor as high-end phones increasingly proliferate the market.


But although Google has admitted its online store foray is being tackled in baby steps, Leach said there are obviously lofty goals behind it all. Google Android was launched with a single device and has since become available for multiple devices in different countries and supported by different carriers, noted Leach. “We know they’ve got large ambitions,” he said.


Google has observed that taking a hands-off approach will only get it so far in the smart phone market, which is why it is throwing considerable weight behind the Android effort, said Kevin Restivo, Toronto-based senior analyst for worldwide mobile phone tracker with research firm IDC Corp.


Google has one of the best known brands around the world and by playing a more active role, said Restivo, it is “trying to cut a swathe out of what’s now a jungle.”


Nexus One is currently runs only on the GSM network but is not yet available in Canada. If offering the unlocked device via a direct sales channel is to succeed north of the border, Restivo said Google must see to it that the device is capable of running on various networks to allow consumers the choice of carrier.


There is an appetite in the Canadian market of another entrant to the high-end smart phone arena that is currently dominated by Research In Motion and Apple, said Restivo.


Pricing follows suit with the hardware, which is not as innovative either, said Leach, who expected more aggressive pricing to “shake things up a bit more.”

Follow Kathleen Lau on Twitter: @KathleenLau

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