Google phone revolution or misdirection?

Analysts interviewed Friday were divided over what to make of the "Nexus One" smartphones that Google is having workers test internally.

"We are having a big discussion whether this is going to kill Android or make it," said analyst Rob Enderle of Enderle Group in Silicon Valley.

"It looks like Google is moving to see if they can do the Apple thing."

Apple iPhones dominate the smartphone market, in part because the California company "controls the customer experience" from design of handsets to programs available at the hugely successful online App Store.

Canada-based Blackberry maker Research In Motion rules the business market with a similar approach, instead of licensing software to device makers who call the shots regarding hardware.

"When you have too many cooks in the kitchen, who actually owns the menu?" Enderle asked rhetorically. "Apple and RIM have one person owning the phone. Clearly it is worth experimenting with. This could work."

Google had Taiwan-based HTC make the hardware for Nexus One, the devices it gave employees last week to experiment with in a process referred to as "dogfooding."

If Google markets an "unlocked" phone, meaning it isn't tied to a specific carrier, customers would face price premiums because telecom firms routinely subsidize hardware to get lucrative multi-year service contracts.

"Google clearly is not going to sell this merely as an unlocked, unsubsidized phone at a commensurate high price point (over 500 dollars)," Ovum research fellow Jonathan Yarmis said in a note.

"More disruptive than the phone itself is likely to be how they approach the business model."

Liberating itself from carriers would free Google to put its online ad targeting skills to work generating revenue to subsidize its smartphones, according to analysts.