SAN FRANCISCO Google unveiled its new Nexus 5 smartphone Thursday as the Internet search giant steps up competition with Apple's iPhone, especially in emerging markets.
The device has a 5-inch display and is tightly integrated with new Google search capabilities and Google Now, the company's personal-assistant technology, through the home screen. It went on sale Thursday.
Nexus 5, which Google developed with LG, comes with a new camera that corrects for small hand movements to reduce blur. New camera software also helps users take better photos in difficult situations, such as low light with fast-moving subjects.
The device comes in black and white and costs $349 for a 16GB unlocked version or $399 for 32GB. That's cheaper than Apple's new iPhones. The iPhone 5c, the cheaper of the two new iPhones, costs $549 for a 16GB version that comes without a wireless contract.
"This is a cutting-edge device at an incredible price," said Sundar Pichai, who heads Google's Android business.
Price is particularly important in faster-growing developing markets, where there are fewer wireless contracts to subsidize expensive phones and where people have less money to spend on a costly unlocked device.
Pichai said one of the company's major goals for 2014 is to get its Android mobile operating system into the hands of the next billion users. Earlier this year, Google announced its one billionth Android activation.
"Android already leads based on units shipped. This is another step for Google to extend that," said Carlos Kirjner, an analyst at Sanford C. Bernstein. "Google wants to get to a point where the number of users is so large that, as a developer, you have no choice but to develop for Android first."
In emerging markets such as Brazil, Russia, India, Indonesia and Mexico known as BRIIM internally at Google Android is growing at three times the rate in developed countries, Pichai said.
However, the smartphones in these emerging countries often run earlier versions of Android, such as Gingerbread, because the devices don't have enough computer storage memory to handle newer operating systems.
Google's latest version of Android, known as KitKat, has been engineered to use less memory, Pichai said. For instance, Google's Chrome browser will use less 16% less memory on KitKat, compared to the previous version of Android called Jelly Bean, he noted.
The lower memory requirements should encourage Android smartphone manufacturers to install the latest operating system and should make it easier for existing devices to upgrade and still run smoothly, the executive explained.
"To make KitKat work on an entry-level smartphone. ... That makes a big difference," Pichai said, while adding that Google aims to have one version of Android running across all Android smartphones in 2014.
"On the journey to reach the next billion people we need to make sure they are all on the same operating system," Pichai said.
Bernstein's Kirjner was also impressed by new search technology that Google unveiled Thursday. Search is still a product that can be improved, providing more revenue opportunities, the analyst added.
Pichai runs Google's Chrome and Apps businesses, not just Android, and the executive said he is working on getting these products to work together. One of the first ways is to get Google searches to trawl through data on the apps loaded onto Android smartphones, starting with the Nexus 5, he explained.
When a user types in a search term, Google will show results from the web, but now it will also show results from within the apps installed on the user's phone.
Google is launching this with 10 initial app partners, including Flixster, Trulia, IMDB, Etsy, Newegg and Expedia. But the company is opening it up to all developers so all apps can work this way on Android devices in the future, Pichai said.