Wall Street cool on rumored Google phone launch

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    foreign_news
    Published on 01-05-2010
    9 Comments Comments
    Shrouded in mistery Wall Street cool on rumored Google phone launchGoogle Inc is expected to unveil its highly anticipated Nexus One smartphone on Tuesday, marking a first foray into an increasingly crowded market that could shape the future of the company's advertising business.
    Gadget lovers around the world will focus on Google's corporate headquarters in Mountain View, California, where the Internet search leader is expected to announce the phone. But the tech world's fascination has not carried over to Wall Street, which is taking a wait-and-see view on Google's first effort to sell a hardware product directly to consumers.
    Google's stock has risen about 7 percent since the start of December, setting a 52-week high of $629.51 on Monday. But analysts say that was driven by improvements in its core business of Internet search advertising, rather than the prospect of tapping a new pool of revenue selling smartphones.
    Unlike Apple Inc's iPhone, which upended the mobile phone industry when it was released in 2007 and has helped propel Apple's stock more than 70 percent since, Google's Nexus One phone appears to be less of a game-changer -- at least from what is known about it so far.
    "There's really not much that's groundbreaking at this stage," said UBS analyst Brian Pitz.
    Many of the details of the Nexus One -- which Google has yet to confirm actually exists -- have trickled out via various Internet blogs, media reports and analysts in recent weeks, including technical specifications and pricing.
    Early reviews in Barron's and the Engadget.com blog depict a device not drastically different than existing smartphones that feature Google's Android software, such as the Motorola Inc Droid and the HTC Hero. The phone has a large touchscreen, 4 gigabytes of flash memory and a 5 megapixel digital camera, as well as the latest, 2.1 version of the Android operating system, according to the reviews.
    "Most investors would be neutral on this event near-term," said Kaufman Bros analyst Aaron Kessler.
    "Longer-term, people are looking for stuff outside of search to drive revenue growth, but I don't think there's an expectation over the next year or two that that really happens from mobile in general."
    SHROUDED IN MYSTERY
    Technology blog Gizmodo.com last week said the Nexus One will be available for US$180 with a two-year contract from Deutsche Telekom's T-Mobile USA, or for US$530 for consumers who prefer to buy the device without a carrier contract.
    Those prices are comparable to other smartphones on the market and unlikely to be "disruptive" to the industry's existing price plans, Goldman Sachs analyst James Mitchell wrote in a note to investors last week.
    Many analysts view Google's entry into the smartphone market as a means to bolster its position in the nascent mobile advertising market, rather than an indication that Google intends to become a major player in the hardware business.
    "I don't think they have aspirations of selling a million of these units," said UBS's Pitz.
    In November, Google said it would buy mobile advertising firm AdMob for US$750 million, its third-largest deal ever.
    According to some analysts, the Nexus One phone will provide Google with valuable first-hand knowledge about the mobile market as it seeks to expand into the Web's new frontier. Google may also see the Nexus One as a way to exert more control over the design of Android smartphones, instead of being beholden to its partners for innovation.
    But the move is not without risks. By selling its own device, Google may upset partners like Motorola, who currently sell phones based on Google's Android software and would compete with Google.
    And Google lacks experience selling consumer hardware and providing the kind of telephone technical support typically expected by consumers.
    The answers that Google provides to those questions on Tuesday, as well as the opportunity that Google sees in the broader mobile advertising market, will be as important as the bells and whistles of the new device, analysts say.
    "The overall adoption of mobile Internet, regardless of the platform, is what is more important from an investment perspective for Google," said Needham & Co analyst Mark May.
    Argentina: Buenos Ares Herald
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    1. foreign_news's Avatar
      Attachment 619Google has begun selling mobile phones directly to consumers, taking on hardware makers like Apple in an effort to dominate the burgeoning mobile internet space.
      The company had been testing the Nexus One smartphone with employees through a process it dubbed “dogfooding”, but today it announced the device would be available more broadly through its web store.
      The Nexus One, based on Google's Android platform, will initially only be available to those in the US, Britain, Singapore and Hong Kong.
      Attachment 620
      It will sell for $US529 outright and $US179 on a two-year contract from T-Mobile USA.
      A Google spokeswoman said the company wanted to roll out the device “gradually” in order to receive feedback and ensure the ordering process was smooth.
      “The Nexus One also had to undergo certification in all countries we sell the phone in, and we wanted to ensure that the import regulations didn't make the phone prohibitively expensive,” she said.
      The spokeswoman said Google hoped to sell the Nexus One, “and future phones from Google”, to people in other countries such as Australia “soon”.
      Rather than a money spinner, Google hopes the Nexus One will serve as a Trojan Horse for its vast array of web services, cementing the company as a leader in mobile search and applications.
      The fight for control of the mobile space is seen as so important that even hardware makers - such as Samsung with “Bada” - have developed their own mobile phone software platforms.
      “The Nexus One belongs in the emerging class of devices which we call 'superphones', with the 1GHz Qualcomm Snapdragon processor making it as powerful as your laptop computer of three to four years ago,” said Andy Rubin, Google's VP of engineering.
      “It's our way to raise the bar on what's possible when it comes to creating the best mobile experience for consumers
      “We look forward to working with handset manufacturer and operators to bring more phones to market through this channel worldwide.”
      The timing of the announcement was designed to deliberately overshadow the Consumer Electronics Show, which runs this week in Las Vegas. It comes 24 hours ahead of a keynote speech by Microsoft CEO Steve Ballmer.
      Apple is also expected to expand its portable offerings late this month with the launch of its much-vaunted tablet computer.
      The Nexus One was designed in partnership with Taiwanese manufacturer HTC, which made a number of the first Android-based phones to go on sale worldwide.
      These have not been a runaway hit with Australian consumers as the early devices, such as the HTC Dream, lacked the stylish design, array of apps and solid marketing campaign of other platforms.
      The Nexus One runs a new version of Android that includes built in Google Maps Navigation (with turn-by-turn driving directions), a voice-enabled keyboard, five home screen panels, interactive “live” wallpapers and the ability to operate the phone just by speaking into it.
      It supports multiple work and personal email addresses and the ability to easily switch between regular communications and social networking apps such as Facebook.
      Over 18,000 apps are available to download from the Android Market.
      The name Nexus One was inspired by the film Blade Runner, and the family of author Philip K Dick has threatened to sue Google over the matter.



      Specifications
      • Display: 3.7" AMOLED 480x800 WVGA display
      • Thickness: 11.5mm; Weight: 130g
      • Processor/Speed: Qualcomm Snapdragon(TM) 8250 processor, with speeds up to 1GHz
      • Camera: 5 megapixel auto focus with flash and geo tagging
      • Onboard memory: 512MB Flash, 512MB RAM
      • Expandable memory: 4GB removable SD Card (expandable to 32GB)
      • Noise Suppression: Dynamic noise suppression from Audience, Inc.
      • Ports: 3.5mm stereo headphone jack with four contacts for inline voice and remote control
      • Battery: Removable 1400 mAh
      • Personalized laser engraving: Up to 50 characters on the back of the phone
      • Trackball: Tri-color notification LED, alerts when new emails, chats, text messages arrive
      Attachment 621
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