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Nexus One a New Lifeline for Android, if not an iPhone Killer

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Image via The Globe and Mail
Image via The Globe and Mail

While Google didn’t manage to offer too many surprises when it released the Nexus One today, it did deliver another generally well reviewed phone running on the Android operating system. The biggest knock is that many, like Engadget, miss the multi-touch functionality and the physical keyboard.

The long-term effects of Google getting into the hardware business are unclear. Google’s selling the phone directly through, and that may hurt some of its relationships with carriers. But Google’s also selling a phone that requires a pricey data plan that will run a minimum of $70/month, so with more consumers upgrading to phones that cost $1,000 a year or so, that could help smooth things over. And part of Google’s mission is to make phones consumers love – it’s a point of pride for Google to offer the best phone on the market – so the happier consumers are with their devices, the more likely they’ll at least tolerate the service providers.

The short-term effects will be more Android phones on the market, giving Android the potential to continue to eat away at others’ market share. As Silicon Alley Insider reported, interest in Android is coming at the expense of other phones – namely iPhones and those running Windows Mobile and Palm OS. Marketers will inevitably follow market share.

Market share will also determine how marketers decide to build and distribute mobile applications. The iPhone remains the gold standard for apps, with 100,000 apps and over 3 billion app downloads. Android apps now number 20,000 – but growing fast. Android can also cast a wider net – it resembles Windows Mobile far more than it does the iPhone in the sense that it’s designed to run on as many devices as possible. CCS Insight predicts more than 50 Android phones will ship this year, so the long tail will get pretty fat pretty quickly.

Marketers won’t just have the option of building apps. They can also consider targeting media to different operating systems and handsets. The typical ‘friends and family’ T-Mobile user has a different profile than a BlackBerry user, and even with the BlackBerry, some devices skew toward different genders.

While marketers can target media spending through mobile fairly easily, targeting apps is harder as they don’t scale well across platforms. It’s resource-intensive in terms of labor and cost to develop apps for multiple operating systems, and Android should only become more appealing in the coming months.

For marketers, the Nexus One is evolutionary. It’s just one more Android phone on the market. Yet it’s part of a tidal wave that’s coming as mobile data activity continues its exponential rise, and Google – with Android, mobile versions of Google services like search and maps, voice search, and its acquisition of AdMob – is squarely at the center of it.