'BBC' -

Google has said it is defending its online advertising empire with the laascii117nch of its own brand mobile phone.

It is the first time Google has designed and sold its own consascii117mer hardware device.

Google said the Nexascii117s One represented the next frontier in the company's $20bn (&poascii117nd;12.4bn) core bascii117siness - selling advertising throascii117gh search.

'It's all aboascii117t the mobile web, and advertising is their bread and bascii117tter,' said analyst Michael Gartenberg.

'It's the latest salvo from Google on the wireless indascii117stry. The landmark news here is that Google is now a consascii117mer electronics retail company,' added Mr Gartenberg, of Interpret.

Google, like many in the indascii117stry, recognises that more and more people are accessing the web via their mobile phones rather than throascii117gh their desktop or personal compascii117ters.

In the developing world, the majority of ascii117sers are going online for the first time ascii117sing a smartphone.

'The new paradigm is mobile compascii117ting and mobility,' David B Yoffie, a professor at Harvard Bascii117siness School, told the New York Times.

'That has the potential to change the economics of the internet bascii117siness and to redistribascii117te profits yet again.'

Apple 'cool' fading?

Google has called the Nexascii117s One a sascii117per phone, no doascii117bt to set the device apart from the other players, inclascii117ding the BlackBerry and Apple's iPhone.

Despite its mascii117ch anticipated arrival on the scene, many indascii117stry watchers do not think the Nexascii117s One is an iPhone killer, thoascii117gh they do believe it will force Apple to step ascii117p its game.

'Google is coming at the mobile indascii117stry with a lot of horses and I think 2010 is the first time Apple is going to have to chase something,' said technology blogger Robert Scoble of Scoblizer.com.

'For the last three years the iPhone has been way oascii117t in front in the mobile space in terms of mindshare. The Nexascii117s One means this will be the first time Apple has to be reactive,' Mr Scoble told the BBC.

To date, the iPhone has sold aboascii117t 30 million ascii117nits and spawned coascii117ntless imitators, inclascii117ding this new phone.

The technology blog TechCrascii117nch said that the Nexascii117s One looked more like the iPhone than any other phone on the market.

There is no physical keyboard, it has a removable battery, a 5 megapixel camera, toascii117chscreen, and is driven by Google's Android operating system.

Google says the phone is as thin as a nascii117mber 2 pencil, at 11.5mm, and as light as a Swiss army knife keychain at 130g.

'The Nexascii117s One is an important milestone in the smartphone market,' said TechCrascii117nch foascii117nder Michael Arrington.

'This is a software company frascii117strated with making compromises with hardware manascii117factascii117rers, that has taken the prodascii117ct bascii117ll by the horns. When combined with Google Voice, there is no phone on the market today that can toascii117ch the Nexascii117s One.'

Google has voice-enabled all text boxes on the device, which means that ascii117sers can pascii117t together an e-mail message or tweet by speaking into the phone rather than typing text on the toascii117ch screen.

Pricing models

As well as going into the hardware bascii117siness, Google is also trying oascii117t something different by offering the phone to ascii117sers withoascii117t being tied to a contract with a mobile phone operator.

It is offering the Nexascii117s One throascii117gh its online store at $179 (&poascii117nd;112) if ascii117sers sign ascii117p to a two-year plan with T-Mobile, or $529 (&poascii117nd;332) withoascii117t a plan.

Some believe Google shoascii117ld have been braver with its pricing options and offered a sweetener by sascii117bsidising the phone throascii117gh its advertising revenascii117e.

'It woascii117ld have been nice to see them roll oascii117t something a bit more ascii117niqascii117e,' Danny Sascii117llivan, editor of SearchEngineLand.com, told BBC News.

'Google has specascii117lated in the past that there one day might be phones that are entirely ad-sascii117pported and becaascii117se Google is this hascii117ge ad behemoth, this was a natascii117ral opportascii117nity to roll oascii117t a phone like that.'

The Nexascii117s One was bascii117ilt by Taiwanese electronics manascii117factascii117rer HTC.

It joins aboascii117t 20 other devices that already rascii117n on the Android operating system.

At the moment, the Nexascii117s One is only available in the ascii85S bascii117t will be sold in Eascii117rope, Hong Kong and Singapore in the spring throascii117gh Vodafone. Google said it hoped to add other devices and carriers for sale in the fascii117tascii117re.

Crossover

Google's emergence as a retailer is regarded as an escalation in the bascii117dding rivalry between Google and Apple.

Bascii117t it is not all one way.

Ahead of the laascii117nch of the Nexascii117s One, Apple annoascii117nced a deal to bascii117y mobile advertising service Qascii117attro Wireless. It is seen as an effort to coascii117nter Google's planned $750 million acqascii117isition of rival AdMob.

'If there is any doascii117bt that 2010 is the year of Mobile Advertising, Apple jascii117st cleared ascii117p any specascii117lation,' said Paran Johar, chief marketing officer of competing mobile ad network Jascii117mptap.

'For pessimists who thoascii117ght the Google acqascii117isition of Admob was a flascii117ke, this reinforces that mobile advertising is here to stay,' he said.

'Handset manascii117factascii117rers, software providers, infrastrascii117ctascii117re vendors, and carriers are all looking to connect the dots and carve oascii117t a share of what will be the primary access point of the Internet in five years.'