Nearly a year after Google unveiled its first branded smartphone in an unsuccessful bid to transform how consumers bought phones, the company on Monday unveiled its successor. The “Nexus S” won’t change how people buy a phone, but it could someday alter the way people buy almost anything else — by using their smartphone as a credit card.
Like its first branded phone, the Nexus One, the Nexus S will be available either “unlocked” or with a two-year contract from T-Mobile. Unlike the Nexus One, which was built by HTC and could be purchased directly from Google online, the Nexus S is built by Samsung and will be sold after Dec. 16 by Best Buy.
But as it rolls out the latest version of its fast-growing Android operating system, which could soon allow Nexus S owners to pay for something by touching their smartphone on a checkout line sensor, Google is again bidding to transform what people do with phones — and opening potential revenue sources in the process.
“I think it’s a big incremental step,” said Will Stofega, an analyst for the research firm IDC. “It’s not quite revolutionary.”
When Google unveiled the Nexus One in January, Android had a paltry 7 percent of the U.S. market share, a distant third to Research In Motion’s BlackBerry and Apple’s iPhone. Now Android claims a 23.5 percent share, nearly even with Apple’s iOS and rapidly narrowing the gap with RIM, according to comScore.
While Google’s bid to sell the Nexus One online was a bust, Google executives like Android chief Andy Rubin have called the Nexus One a success because its powerful features drove smartphone technology forward.
Google has continued to churn out new versions of Android — the new version on the Nexus S is dubbed “Gingerbread” — a step that observers say was necessary as Google hurried to match the iPhone.
“They kind of had to work this quickly if they wanted this to be successful, because the first versions of Android were terrible,” said Avi Greengart of Current Analysis.
“They are still in catch-up mode with Apple,” said analyst Ken Dulaney of Gartner, “but they are getting there.”
One of Android’s growing pains is what software developers call “fragmentation,” where an app that runs fine on one version may not work on early versions of the operating system.
People ranging from the director of multimedia for Major League Baseball to solo software developers have recently complained about the difficultly of producing apps that run well across the other four versions of Android, and on the more than 100 Android devices released since the first phone in November 2008.
“For certain kinds of developers it makes the development of apps difficult. If you are developing games and you have multiple versions of the operating system, you want that game to have a good experience regardless of what OS it’s on,” said Patrick Mork, chief marketing officer for GetJar, a San Mateo company that has the world’s largest cross-platform app download store. “It can add development time, which adds cost.”
Not all developers agree fragmentation is a big problem, however. Now that Android has gained so much momentum, Google is expected to slow the pace of releases, allowing its partners to catch up.
Whether NFC technology — short-range wireless technology that can be embedded in objects like movie posters, stickers and T-shirts — turns credit cards into dinosaurs remains to be seen.
Initially, the NFC chips in the Nexus S will only gather information rather than export it, as would be necessary to allow a consumer to purchase. A user could walk up to a movie poster with an embedded NFC tag, touch their phone to the poster, and see a movie trailer pop up on their phone, for example.
Down the road, Google could make software changes to allow NFC to be used to make purchases. While NFC technology in the past has failed to attract enough retailers to offer it, the proliferation of smartphones and Android’s popularity could change that, experts said.
If so, Google “can monetize that,” Stofega said. “If Google keeps going the way it’s going, distributing Android over a growing plethora of devices, that makes it an even more important force.”
Contact Mike Swift at 408-271-3648. Follow him at Twitter.com/swiftstories.
New smartphone, new Android software
Samsung-Google “Nexus S” features:
1 GHz Hummingbird processor, front- and rear-facing cameras, 16 gigabytes of internal memory and wireless hardware that could allow the phone to be used as a credit card; up to 6.7 hours talk time on 3G. Price from Best Buy: $529 unlocked; $199 with two-year T-Mobile contract.
Android “Gingerbread” features:
New keyboard and text selection tool, direct Internet calls without launching an app, improved copy/paste functionality and gyroscope sensor support (useful for games), NFC support.