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Googlephone facing 10m more Jobsian challengers?

'Nexus One' pics appear online

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The Googlephone may be coming, but Apple's commanding lead won't be easy to overcome.

As The Reg reported over the weekend, Google employees received early Christmas gifts from their Mountain View masters: pre-release versions of the upcoming Googlephone, dubbed in breathless sci-fi manner as the Nexus One (Engadget has snaps).

However, other news also surfaced over the weekend that may not have been as gadget-geeky gee-whizzian, but which must have reminded even the most ardent Googlian that no matter how spiffy any Nexus One (or Two, or Three) might be, the iPhone's large and growing installed base makes it a formidable leader of the computer-in-your-pocket market.

As reported by DigiTimes, Taipei's Market Intelligence & Consulting Institute (MIC) recently issued a report on the health of the Taiwanese smartphone IC industry.

How is Apple doing? Quite well indeed - thanks in large part to the iPhone 3GS. "In the third quarter of 2009," DigiTimes reports, "sales of the Apple iPhone 3GS far exceeded expectations, and sales are expected to reach 10 million in the fourth quarter of 2009." In a lovely bit of understatement, the Taiwanese marketwatchers conclude: "iPhone chip suppliers have benefited from this development."

To put that projected 10 million iPhones in perspective, remember that during Apple's most recently completed fiscal quarter - which ended on September 26 - the Cupertinians sold 7.4 million iPhones. A jump to 10 million would be an increase of 35 per cent.

The DigiTimes report goes on to detail how the rising tide is lifting all boats. Taiwanese smartphone chip shipments overall hit 116.97 units during the third quarter of 2009 - a 30.9 per cent increase from just the previous quarter.

The MIC report that DigiTimes cites isn't an impulse buy - a copy will put you back a cool $2,040 - but odds are there's one on Google CEO Eric Schmidt's desk right about now. All this increased demand for smartphone ICs is almost certainly going to cause Adam Smith's invisible hand to mark up part prices just around the time that the Nexus One moves from Christmas gift to new on-store-shelves hotness.

And it's unclear how Google will be selling the Nexus One when and if it becomes productized. Most reports aver that Mountain View won't be coupling with a wireless provider, though some say it may. Maybe both. Google itself isn't saying. If they do decide to go it alone, of course, that non-subsidized initial purchase price will undoubtedly be a hefty one.

To be sure, the iPhone has its flaws, Apple treats many of its developers like serfs, and exclusive-carrier AT&T's network is far from perfect - despite how vociferously the New York Times may argue to the contrary.

But the minds behind the Nexus One will have their work cut out for them in chipping away at the iPhone's lead and sucking a critical mass of iPhone developers into the Googlephone orbit - all while figuring out how to deal with their own Android-based competition from such heavyweights as HTC and Motorola.

Despite all the putative "iPod killers" that tried to catch Apple's previous market monopolizer, not one even came close. And as Palm has discovered with its Prē, putting a dent in the iPhone's market dominance is no piece of cake, either.

But Google does have a few advantages over any company that tried to catch either the iPod or the iPhone: barrels of cash, a single-minded focus on world dominance, and the ability to control the product experience from cradle to browser to grave.

Just like Apple. ®

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