Google Phone to Run On IPhone's System

The Nexus One phone from Google Inc., left the Apple iPhone 3G AP Photo

Google Inc. has upgraded its Nexus One phone so it works on the same high-speed wireless network as Apple Inc.'s iPhone, putting the increasingly antagonistic rivals on an even more direct collision course in the mobile market.

The latest version of the Nexus One unveiled Tuesday could make the device a more serious challenger to the iPhone, which uses AT&T Inc.'s 3G network as its main communications channel in the United States.

The Nexus One had been running on AT&T's slower networks since Google began selling the handset in early January. The switch to AT&T's faster system represents another step in Google's attempt to siphon sales from Apple's iPhone with its own version of a sleek mobile phone that relies on touch-screen technology.

Analysts don't believe the Nexus One has made a big dent yet, despite Google's efforts to promote the Nexus One as a "super" phone that's a cut above the iPhone.

Nevertheless, Apple is aggressively protecting its turf as it tries thwart the Nexus One and several other mobile phone models that rely on Android, a software system designed by Google.

In a lawsuit filed earlier this month, Apple alleged HTC Corp. - the maker of the Nexus One and other Android-powered phones - has infringed on its touch-screen patent.

Google hasn't said how many Nexus Ones have been sold so far. BroadPoint.Amtech analyst Benjamin Schachter estimates Google will sell about 125,000 of the phones during the Nexus One's first three months on the market. Apple has sold about 40 million iPhones since the device's 2007 debut, including 8.7 million in last year's final quarter.

Nexus One's upfront cost can be substantially higher than the iPhone because Google is selling some models without subsidies from wireless carriers to make it easier for consumers move to other networks.

The unsubsidized version of the Nexus One sells for $529. The iPhone sells for as little as $99 with a two-year commitment to subscribe to AT&T.

Consumers willing to shoulder a two-year contract with T-Mobile can buy a Nexus One for $179.

AT&T has no plans to subsidize the Nexus One although it welcomes all phones compatible with its 3G network, said company spokesman Fletcher Cook.
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