Google has shaken the foundations of the smartphone industry with the official announcement of the Nexus One. What impact will it have in 2010?

Designed by handset manufacturer HTC using the open-source Android 2.1 operating system, Google Nexus One will be available via Google?s newly launched Web store. The phone 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?with other carriers soon to follow.

?It?s an exciting day for the industry, and it?s beyond just the manufacturers per se?you also have to look at the impact on the operators,? said Dominique Jodoin, president/CEO of Bluestreak Technology, Montreal. "My take is that the iPhone has taken the lion?s share of the market to the chagrin of operators, which have been able to get data revenue but have not been able to touch application revenue.

?The Google Nexus One creates a new level playing field,? he said. ?I believe this will generate momentum for enabling users to port Android applications from one device to another, which up till now has only been a beautiful dream.

?I think that?s all great news for the prospects for Nexus One and for Android in general, as there is big pent-up demand from carriers for iPhone-like devices,

Many are speculating about the effect that the Nexus One will have on the sale of other Android devices. Some believe it could inspire manufacturers to step to the plate and up the ante.

?So far Android has been a disappointment, but with this device, Google has said, ?Look, this is what you can do with the Android platform if you do things in a different way,? which is raising the bar for the whole Android community out there,? Mr. Jodoin said.

?There will be advantages to Android 2.1 when it comes to multimedia-playing,? he said.

Verizon Wireless joins the party
The biggest surprise was the fact that Verizon Wireless in the U.S. and Vodafone in Europe will offer the handset at a subsidized rate starting sometime in the spring of this year.

?The most surprising part of the announcement was the partnership with Verizon,? said Noah Elkin, senior analyst at eMarketer, New York. ?If you look at the device itself, there was a lot of nice evolution of the features that are already available on Android, but I would characterize the device as more evolutionary rather than revolutionary for the industry.

?Google also talked about a future where there are more devices that are part of this program where consumers can buy it and activate it online,? he said. ?Google seems to be taking a page out of the Apple iPhone playbook.?

The competition in the smartphone industry continues to ramp up.

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 (see story).

?Google tried to coin a new term today?they called the Nexus One a superphone, a super-smartphone,? Mr. Elkin said. ?All smartphones are getting smarter, and that?s the secular trend, packing more features and more memory into these pretty small packages, that?s the process in the evolution of devices.?

As Research In Motion proved with the BlackBerry Curve, being on as many carriers as possible is vital for wide distribution?and robust sales. That is why avoiding a binding exclusive relationship with a single carrier was a coup for Google.

?Expanding the Nexus to other carrier partners will certainly help them compete,? Mr. Elkin said. ?If it was just with T-Mobile, it would be difficult to scale it in the way they?d like.

?Adding more carrier partners improves their chances relative to the competitive landscape,? he said.

Charles Golvin, principal analyst at Forrester, Cambridge, MA, said the Nexus One is really a nice device.

What impressed him most is the voice input and the the ubiquitous support for the voice recognition mechanism for search and recognition.

"It is interesting that Google has established itself now as an online retailer of phones," Mr. Golvin said. "Sure that?s going to expand beyond one device, but nothing they?re offering from a retail standpoint that you can't get from the carriers or Best Buy Mobile.

"Part of what they are counting on is that more and more mainstream consumers are going to be comfortable buying their phones in this manner and not feel like they need a hands-on experience," he said. "They can hear about it from their friend and experience the 3D preview on the Web and be comfortable with that.

"The new phone positions Google well to compete, as the company continues to innovate and advance the platform--it will be a good year for Android."

Google's spin
Mario Queiroz, vice president of product management at Google, Mountain View, CA, discussed the Nexus One in a blog post:

The first phone we'll be selling through this new Web store is the Nexus One?a convergence point for mobile technology, apps and the Internet.

Nexus One is an exemplar of what's possible on mobile devices through Android?when cool apps meet a fast, bright and connected computer that fits in your pocket.

The Nexus One belongs in the emerging class of devices which we call "superphones."

It's the first in what we expect to be a series of products which we will bring to market with our operator and hardware partners and sell through our online store.

Manufactured by HTC, the Nexus One features dynamic noise suppression from Audience Inc., a large 3.7" OLED display for deep contrast and brilliant colors and a 1GHz Qualcomm Snapdragon chipset for blazing speeds.

Running on Android 2.1, the newest version of Eclair, the software includes innovations like a voice-enabled keyboard so you can speak into any text field, fun Live Wallpapers, a 3D photo gallery for richer media experiences and lots more.

Of course, it also comes with a host of popular Google applications, including Gmail, Google Voice and Google Maps Navigation.

Today, the Web store allows you to purchase the Nexus One without operator service or with service from T-Mobile USA.

We expect to add more operators, more devices and more countries in the future, including Verizon Wireless in the U.S. and Vodafone in Europe.

To learn more about the Nexus One, and our new Web store, we recommend checking it out for yourself by visiting http://www.google.com/phone.

We look forward to seeing how our new program and the Nexus One contributes to accelerating innovation on mobile products for the benefit of users worldwide.