Will the company that revolutionized Internet search send the Apple (AAPL) iPhone looking for answers?
At a press gathering on Tuesday, Google (GOOG) unveiled the Nexus One, a Google-branded smartphone that will run on the search giant's Android operating system. Some analysts say Google's new device, which is being built by HTC of Taiwan based on Google's specifications, will deal a stiff blow to Apple's hegemony in the smartphone arena.
|More from SmartMoney.com: |
• Cheap Netbooks: Bad for Business?
Google's New Goody: Threat to Your Privacy?
• Whether to Ditch Your Gadget Chargers
Where could Google succeed where other competitors have failed? The Nexus One boasts speed improvements and enhanced camera capabilities, and the device will be sold unlocked. So rather than being forced to sign a contract with AT&T (T), a service provider that has been criticized for network mishaps and poor customer service ratings in the last year, buyers may purchase service plans separately from the device.
The Nexus One is also nice to look at, says Michael Gartenberg, the vice president of strategy and analysis for Interpret, a market researcher in Los Angeles. "Google's Nexus One is a beautifully designed device," he says. "It looks like Google looked at the iPhone and said we can do better."
For now, the iPhone is the dominant device in the sector. And critics of Google's device say the company's design improvements offer only slight advantages over existing devices and won't necessarily shake iPhone from its perch yet.
SmartMoney took a closer look at how Apple's iPhone and Google's new Nexus One match up:
The unlocked version of the Nexus One, which will be sold directly to consumers via a new web store hosted by Google, will cost $529. A locked version of the phone, which will be sold initially by T-Mobile, will cost $179 with a two-year contract that will cost roughly $80 a month.
Apple's iPhone 3GS now costs $199 with a two-year contract with AT&T.
Advantage: Nexus One
For iPhone users, the only service provider is AT&T. AT&T says it has the fastest 3G network -- a claim backed by organizations like the industry testing firm Global Wireless Solutions and Piper Jaffray. Still, the telecom giant's struggles with outages and slowdowns have been widely reported and culminated in a recent suspension of iPhone sales in New York and San Francisco. AT&T says that switching its "distribution channels" was the reason for the service halt. "While there's always more to be done -- particularly in markets like Manhattan and San Francisco -- we have a high sense of urgency and we're on the right track," says Fletcher Cook, a spokesman for AT&T.
Like the iPhone, the Nexus One is also built for the GSM network. And while T-Mobile is currently the Nexus One's only so-called subsidized provider, the device can also operate on AT&T's network. However, because the device operates at frequencies unique to T-Mobile, "it won't be able to achieve 3G speeds on AT&T," says Jay Nakahara, a technology sector specialist at ICAP in New York. "If it is true that the Nexus One only runs at 2G speeds on AT&T, I find it hard to believe that there will be a lot of demand to buy an unlocked version."
Nexus One may have other suitors in the future. Verizon Wireless (VZ) in the U.S. and Vodafone in Europe plan to eventually sell the Nexus One, according to Google.
Advantage: Nexus One
Apple's app store offers more than 100,000 applications. Google's Android Market offers between 15,000 and 20,000 apps. "You're talking about a [tenfold] difference," says Gartenberg. Although he says the quality of Apple's apps may be vary widely, the momentum and attention among developers certainly favor Apple. "This is where Apple has had a real significant lead over Google's Android," he says.
| More from Yahoo! Finance: |
• Retirement Benefits: What to Expect in 2010
• 10 Things Not to Buy in 2010
• Memo to Meredith Whitney: You're So 2009
Visit the Family & Home Center
Some analysts say that may change. The fact that Google's Android is an open-source platform is attractive to developers, says Rob Enderle, principal analyst at the Enderle Group, a San Jose, Calif.-based technology research firm. An Android app developer can create an app and see it instantly available. However, Apple app developers need to get approval first -- a process that takes roughly 15 days, he says. And Apple can be picky. "People are really having trouble with the approval process," Enderle says.
In addition, "if you're writing an app, you'll write one for the biggest platform," says Nakahara. "It's in Google's best interest for its operating system to be as pervasive as possible," he says. Google's Nexus One will run the Android platform, but so will other devices from HTC, the Motorola Droid and possibly some handsets from Samsung and LG Electronics of Korea, he says.
And Google may soon launch an Android Cloud Service so that users can run on demand apps rather than download them to a handset, says Trip Chowdhry, an analyst at Global Equities Research in San Francisco. Nexus One users will also get access to Google Voice, the company's call forwarding application, which was blocked for the iPhone by Apple.
The Nexus One boasts a five-megapixel camera with a built-in flash and autofocus, while the iPhone 3.2-megapixel camera lacks a flash, says Chowdhry. "This is critical because there is a completely new category of apps called augmented reality, which require high resolution and autofocus to work well," he says.
However, when it comes to usability, the iPhone has the advantage. Unlike the Nexus One, the iPhone has multitouch capabilities that allow users to rotate, pinch and zoom or un-zoom the display with their hands.
Although the iPhone may get a speed boost when Apple comes out with another version in June, at this point, the Nexus One will be faster in general, says Chowdhry. Because the Nexus One will house Qualcomm's (QCOM) latest SnapDragon processor, it will run at about 1 GHz. The iPhone now runs at a slower speed -- about 600 MHz, he says.
The Nexus One also offers a removable battery. Unlike the iPhone battery, which is sealed inside the device, the Nexus One battery can be replaced by the user.
Advantage: Nexus One
The Nexus One's default email account may be through Google's Gmail, but that won't stop users from checking other email accounts, says Nakahara. In checking corporate accounts, though, iPhone and Nexus One users will likely run into similar difficulties, he says.
The Nexus One boasts a larger screen than the iPhone, which may be a benefit for picture taking and overall usability. However, neither the iPhone nor the Nexus One has an actual keyboard, which has upset some users.