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January 7, 2010

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Google Inc launches Nexus One smartphone

GOOGLE Inc took the wraps off a new smartphone that it will sell directly to consumers on Tuesday, aiming to boost its position in the emerging mobile Internet market by exerting greater control over the new generation of Web-surfing devices.

The sleek touchscreen phone, dubbed the Nexus One, is Google's boldest foray outside its traditional Internet home turf and represents the first time the 11-year-old company will sell a consumer electronics device bearing its well-known brand.

But analysts said the phone is not as revolutionary as Apple Inc's iPhone was. Tech Websites and forums gave Google favorable reviews but also noted the new phone was not that different from others in the market that run Google's Android software, such as Motorola's Droid.

The Nexus One ships immediately and exclusively from Google's online store for US$179 with a two-year contract from Deutsche Telekom's T-Mobile USA, or US$529 without a service plan.

The more expensive unlocked phone, analysts said, is priced too high to dramatically alter the relationship between carriers and hardware vendors in which wireless service providers have traditionally controlled handset distribution in the United States.

It "wasn't the game-changer people thought it could be," Canaccord Adams analyst Jeff Rath said. Google could have shaken up the industry by offering the device for free, but instead chose more traditional pricing, he said.

Executives said the phone could be profitable for Google, though analysts are not forecasting a revenue windfall.

The highly anticipated Nexus One, which Google designed in close collaboration with hardware maker HTC, could provide Google with a viable challenge to the iPhone and Research in Motion's BlackBerry.

The Nexus One is the first of a variety of smartphones that were in the pipeline, according to Google.



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