Does 'X' Mark the Spot for Google's Nexus One

A Google-branded phone has been a topic of conversation in the smartphone industry for the past two years, Burden observed. Google started its phone foray by licensing its open source Android operating system to handset manufacturers. That strategy Download Free eBook - The Edge of Success: 9 Building Blocks to Double Your Sales is now gaining some momentum, with favorable reviews and strong sales of recent offerings.

Still, Apple's (Nasdaq: AAPL) iPhone remains the king of the market, so Google may be aiming for a smartphone game-changer.

Possible scenarios: Google may be moving Android closer to Google's core revenue stream by using an ad-based model and offering the NexusOne at cost, suggested Burden.

Or perhaps it is truly just a test phone, "a super-phone for its own employees so they can continue to work on applications," hu mused. "The best developers they have are the actual Google developers themselves, so give the phone to them and let them use it."

There are dangers in a Google-branded phone, Burden added. The company risks angering licensees who are now gaining traction with the new spate of Android phones.

"This points back to the days of the PDAs and Palm," he said, "another company that had its own operating system, it's own hardware, and was competing with its own licensees -- and you saw the fiasco that turned out to be."

The big difference between Palm (Nasdaq: PALM) and Google, Burden admitted, is that the Android OS allows more flexibility on the part of handset manufacturers. Yet adding one more offering to what could be a crowded buffet table of Android phones doing different things and offering different features could take consumer confusion to a new level. How to clear things up and keep licensees happy?

"If they make the case that it's more technically advanced and more expensive than any other Android, they may want to seed the early adopter community. Maybe that makes more sense," Burden said. "If there's this perception that the best experience you get on Android is a phone sanctioned and made by Google, then why would I go buy another Android?

"Google may be thinking, 'We're going to be the tech leaders in all of this and always going to show you what more is possible. So, if you want the best Google experience, then pony up another hundred bucks and buy this Nexus and whatever follows,'" Burden speculated. "The licensees might be more amenable to that