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Google Launches Challenger to iPhone

Taking direct aim at Apple's iPhone, Google on Tuesday introduced its most advanced phone to date - the Nexus One - and opened an online store to sell it directly to consumers.

The phone, available at google.com/phone, costs $179 with a two-year contract from T-Mobile. Similar offers will be available from Verizon Wireless and British carrier Vodafone this year.

You can buy the phone without a contract for $529.

The Nexus One runs an updated version of Google's Android operating system. Built by HTC from Google's direct specifications, it has a touch-screen and a fast processor. It includes a 5-megapixel camera for video and photos, a Global Positioning System (GPS), and stereo Bluetooth connection for headphones.

Among gee-whiz features: speech dictation, which lets you speak and compose e-mail messages, Twitter tweets and Facebook posts without typing.

Google has lagged Apple in the mobile market. It has tried to be a major player with Android, which it offers free to manufacturers and wireless carriers. Some 20 Android phones are available, but few, with the exception of the Verizon Droid (by Motorola), have been big sellers.

The Nexus One could change that, says Charles Golvin, an analyst at Forrester Research: "It's the best Android to date."

Apple has sold nearly 30 million phones in 100 countries. Its U.S. carrier is AT&T. On Tuesday, it said iPhone and iPod Touch owners have downloaded 3 billion applications since it launched the App Store, a marketplace for 100,000 applications that do everything from play games to translate words.

There are around 10,000 apps for Android phones.

The message to consumers is that Nexus One is the flagship Google phone, and the others aren't as good, says Michael Gartenberg, an analyst at Interpret. "If I was a Droid customer who just bought the phone a month ago, I might not feel so good," he says. Google "made it clear that not all Android phones are created equal."

Google's Andy Rubin, who oversees Android, says with its own store, Google could potentially lower wireless plan costs, since it "won't have the built-in costs" of heavy advertising.

Golvin predicts Nexus One will result in sales of "a couple million" phones this year and bigger market share. But Google must push into more countries, and "that's going to take awhile."

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