January 06, 2010

(Bloomberg) — Google Inc.'s (GOOG) Nexus One marks more than the company's entrance into mobile phones: It propels the Internet search engine into online retailing for the first time.

Google yesterday started selling the Nexus One, a phone manufactured by HTC Corp. that uses the Android mobile operating system. The Mountain View, California-based company will also offer other devices that use Android, such as phones from Motorola Inc. (MOT)

By selling directly, Google can forge closer ties to consumers, potentially allowing the company to offer other products and services in the future, said Will Stofega, an analyst at Framingham, Massachusetts-based research firm IDC. Offering a range of Android phones may also spur the development of applications for the software as Google tries to catch up with Apple Inc. (AAPL)

"Once they hold the customer relationship, the opportunity to make money off this relationship increases exponentially," Stofega said.

Nexus One will be carried by T-Mobile USA, the U.S. mobile-phone division of Deutsche Telekom AG. The device will be available on Verizon Wireless later this year. The phone is also available without a contract (VZ).

Motorola, which already sells phones based on Google's Android, isn't concerned about Google's plan for online commerce, co-Chief Executive Officer Sanjay Jha said at Google's event.

Source:-http://www.businessweek.com