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Google Inc (NASDAQ:GOOG): How Exactly Can a Nexus Phone Help The Firm?

Google (GOOG) Nexus Phone

Google Inc. was in the news earlier this week in rumors that the firm will introduce two Nexus smartphones in event it’s holding on Sept 29. Cnet reports that close sources have hinted that Google will unveil two Nexus (Nexus 5 2015) smartphones with two different sizes. The smaller device will be made by LG while Chinese phone maker, Huawei will make the larger one. The firm has not confirmed or refuted the reports but the buzz is already up for the Nexus line based on the rumors.

Google (GOOG) Nexus Phone

Google is not directly involved in the business of making phones, but the Nexus line is as close as you can get to a flagship product in Google’s support for its Android OS. The tech space expects the rumored Nexus phones to run Android 6.0, which has been named Marshmallow. The buzz is high for the devices because they’ll run the “purest” form of Google’s Android that has not been tweaked for the OEMs applications.

Nexus hasn’t done much for Google over the years

It is still unclear what Google’s motives for making the Nexus line of devices are. Some people would argue that the firm is backing Nexus phones in a bid to show OEMs and users the cool things that they can do with the Android OS.

Nexus might be the purest Android phones available but they won’t be as pure as they can be until Google makes and sells the Nexus in the same way that Apple makes and sells its iPhones. More so, Google has set up Android One and any pure Android firmware is likely to come from the Android One project.

Google has also mentioned that the sales of its last Nexus device have been sluggish and the phone business is a deadweight on the firm’s revenue. In the first quarter, Google noted that revenue from the “others” segment could be traced to the “decline” in sales of the Nexus phones.

The firm reported that “Other revenues grew 23 percent year over year to $1.8bn, but were down two percent quarter over quarter… offset by declines in Nexus… “Year over year it hasn’t been as strong given the strength of the Nexus 7 last year.”

Will the next Nexus find its mark?

It is still too early to early to predict how the new Nexus devices are likely to fare when they hit the market. However, the spec sheets suggest that they won’t be able to take on rival “flagship” products in terms of high-end specs. For instance, it seems the Nexus will sport 5.2-inch display with 2K resolution, 3 gigs of RAM, a 808 Snapdragon processor and Adreno 418 GPU.

However, one certain fact is that Google will set a relatively cheap price point for the devices. An iPhone 6 from Apple has a $650 price tag without a contract. Samsung S6 also starts off at $600 without a contract. However, Nexus (LG or Huawei) is not as branded as say Apple or Samsung; hence, a cheap price might not be the best weapon that Google needs to make a mark in smartphone space.

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.

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