Google tests new phone to profit from mobile Web

Monjilur Badhan, Newshoursbd — Google Inc. is determined to gain more influence over how the Web is used on mobile phones, even if the next step in the quest tramples some of the relationships forged during its two-year expansion into the wireless industry.

The focus on Google’s mobile ambitions is sharpening now that the Internet search leader is working on a new phone called “Nexus One.” The handset is being tested by Google’s 20,000 employees, who received the device just before the weekend.

Google declined to comment on the reason for the Nexus One’s development.

But The Wall Street Journal and The New York Times have described the employee testing as a prelude to selling the phone directly to consumers early next year.

The phone — manufactured by Taiwan’s HTC Corp. — wouldn’t be tied to a specific carrier, unlike other devices using Google’s mobile operating system, “Android.” The autonomy of a so-called “unlocked” mobile phone could give consumers more freedom to select the carrier of their choice, although the unique technology running competing U.S. wireless networks will probably limit the options.

It’s not clear how wide-ranging Google’s ambitions are for the phone. Unless Google is willing to sell the phone at a loss, the Nexus One is likely to be much more expensive than Apple’s iPhone and similar devices, which receive subsidies from wireless carriers.

With those subsidies, most “smart” phones sell for $50 to $200, instead of the $400 to $600 price they’d have without the financial aid. The carriers recover their expense through service plans that cost $800 to $1,000 a year.

Without a sharp discount, Nexus One won’t make much of a dent in the mobile phone market, predicted Forrester Research analyst Charles Golvin.

Google, which is based in Mountain View, started selling an unlocked version of the first “Android phone,” T-Mobile’s G1, for $399 last year. It was aimed at Android developers, but anyone who registered as such could buy one.

If it intend to keep the Nexus One’s price low enough to pique consumer interest and protect its earnings, Google might still have to negotiate subsidies from wireless carriers — an arrangement that wouldn’t change the status quo.

Or Google could be hoping to generate enough revenue from ads shown on mobile Web sites and applications downloaded on the Nexus One to cover the cost of any discounts.

But the mobile advertising market in the U.S. is still small, with $416 million in revenue expected this year, according to research firm eMarketer Inc. In the United States, Google generates more than $10 billion annually from the sale of online ads shown on personal computers.

Google hopes to improve its mobile advertising network with the $750 million acquisition of AdMob, a pioneer in the field. That deal is expected to close early next year.

Google tests new phone to profit from mobile Web

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