Google launches new mobile phone

Internet giant Google Inc. has begun selling its own mobile phone, a much-anticipated move aimed at protecting its online advertising empire as people increasingly surf the Web on handsets instead of personal computers.

The Nexus One joins about 20 other mobile devices that already run on Android, the mobile operating system that Google introduced in 2007 to make it easier to connect to its services and other Web sites away from home or the office.

Google designed the touch-screen phone in partnership with Taiwan's HTC Corp., which made the first Android-powered phone and will manufacture this one, too.

Google will handle all sales online and has no plans to let consumers check out the Nexus One in retail stores.

The Nexus One has been in the hands of Google employees for the past three weeks, triggering media speculation and anticipation for the company's first attempt to peddle a consumer electronics device.

Among other things, the Nexus One will offer more ways to customise the phone's home page and use voice recognition technology to perform more tasks, including composing e-mails and navigating Google's mobile mapping products.

The move does escalate the budding rivalry between Silicon Valley's two most valuable companies, Google and Apple Inc., which has sold more than 30 million iPhones in the past 2 and a half years.

Apple announced a deal on Tuesday to buy mobile advertising service Quattro Wireless to counter Google's planned 750 million US dollar acquisition of Quattro rival AdMob.

Both announcements came ahead of this week's International Consumer Electronics Show in Las Vegas.

Google is billing the Nexus One as the first "super" phone in an effort to position the device as a cut above the iPhone and other smart phones such as Research In Motion Ltd's more utilitarian BlackBerry.

But most of the features on the Nexus One are already on other Android-powered phones, and it probably will be a long time before it can offer as many different tools as the iPhone, which boasts more than 100-thousand applications compared with Android's 18-thousand.

Scott Kessler, an Equity Analyst for Standard and Poor's said he did not think the Nexus One would be an "iPhone killer."

"We think that the iPhone is an iconic product that is far ahead of the Nexus One in a variety of different ways," Kessler said.

The Nexus One's $529 price tag is more than twice as much as the most powerful iPhone.

Google is asking consumers to pay more so they can select their own wireless carriers.

That's a departure from the usual sales model in the United States, where mobile phones are typically offered exclusively by specific providers and subsidised by them in exchange for long term contracts.