At Google (GOOG) headquarters on Tuesday, the company finally officially announced its Nexus One, a smartphone designed to go toe-to-toe with Apple's (AAPL) iPhone. Google's own engineering team supposedly designed this phone with assistance from Taiwanese handset maker HTC. Google employees posting on Twitter have given the Nexus One rave reviews (naturally). But many tech pundits have also waxed poetic about how it could be the best smartphone yet that runs on Google's Android operating system.%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 payloadId-61603 alignment-right size-small"%%As a customer, I'm pretty confused. First I thought that the Motorola (MOT) Cliq was going to be a true iPhone competitor. To get that phone you need to sign up on T-Mobile. Then I thought (and wrote) that the Motorola Droid would be the most righteous iPhone rival. To get that phone, you need to sign up on Verizon. Now, I'm hearing that the Nexus One is the One and you can buy it directly from Google and use it on any GSM phone network, or sign up to get one through T-Mobile.
This is a problem. Which phone is the One? Are they all the One? How many more "best smartphone yet" are coming? I have no idea.
A Quieter Invasion
Contrast that with the messages coming out of One Infinite Loop in Cupertino, Calif. Silence. Apple is sticking to its knitting, staying focused, adhering to a standard development schedule and not promising anything. Of course, everyone knows the next iteration of the iPhone should be out in a month or so, and that it will probably do a lot of the things that Verizon (VZ) gleefully called Apple on in its in-your-face "Droid Does" advertising campaign.
Oh, Apple did do one thing. It purchased Quattro (first reported by Kara Swisher at AllThingsD), a mobile advertising network that can compete with Google's own AdMobs acquisition. Apple paid less than $300 million, in contrast with the more princely $750 million that Google paid. While AdMobs does have more customers, it's still the early days of wireless advertising, and few think that any clear winners have emerged yet.
This move is very interesting because Apple has now entered advertising, something I predicted a ways back in saying that Apple would possibly launch its own search engine because Google was become so omnipresent in wireless -- including on Apple's own iPhone. Also, Apple would want to be ready for any new wireless models that emerge, including ones supported entirely by advertising.
Crossing a Competitive Rubicon
The point of this missive is simple. In a very short span Google has made tremendous progress. Android is already the second-most-active smartphone operating system in terms of data usage, by some measures. Considering that a scant four months ago, fewer than five decent Android handsets were available, that's an amazing achievement.
But the chaotic marketing messages could freeze a lot of buyers -- like me. And the rapid-fire emergence of new smartphones every other month could anger potential Android devotees who may have thrown down $200 for a Droid and now are pining for a Nexus One. Barring intervention from the Federal Communications Commission or the Federal Trade Commission, it's hard to imagine the wireless carriers, which are trying to differentiate themselves, eschewing exclusive handset deals.
At the same time, Apple's foray into mobile advertising is something of a watershed. It's now set to compete directly for advertising customers on Google's turf for the first time ever. Whether the Nexus One is the One or not, this much is clear. Some sort of Rubicon was crossed in the past two days, and the competition between Apple and Google can only intensify as two of the best-run tech companies on Earth move into each other's core markets.
What Is Your Risk Tolerance?
Answer the question "What type of investor am I?".View Course »