Google Inc. GOOG-Q officially entered the handset market Tuesday afternoon with the launch of its Nexus One smart phone, a move analysts said was mainly designed to stake out valuable real estate in the burgeoning mobile search market.

At a press conference at Google headquarters in Mountain View, Calif., the company unveiled the unlocked, customizable “super phone” and a new Web store where it can be purchased.

“Today we will unveil the next stage in the evolution of Android,” Mario Queiroz, a VP of product development at Google, said on stage at the press conference.

An image of the Nexus One phone is projected on a screen during a news conference at Google headquarters in Mountain View, Calif., Tuesday, Jan. 5, 2010.

The highly anticipated launch is unlikely to radically alter the already-crowded, global smart phone market the way iPhone did, analysts said, since the device is comparable to other phones already on the market and simply runs a more advanced version of Google’s Android operating system.

Instead of revolutionizing the market for handsets, as Google has done to other markets such as online web searches and online advertising, the introduction of the so-called “Googlephone” simply seems a way for Google to cement its role in web searches on mobile devices. Wall Street, consequently, has been relatively indifferent to both rumours and realities of the phone.

“Everyone wants it to be a game-changer. It won’t be,” said Kevin Restivo, a mobility analyst with IDC Canada who has tested the Nexus One. “This isn’t the next iPhone.”

The phone, an HTC Corp.-designed touch screen device with Google’s pared down Android operating system, is only available for purchase through Google’s website. It sells, without a service plan, for $529 (U.S.) or $179 with a two-year plan from T-Mobile.

“We were very happy working with Google,” said Peter Chou, CEO of HTC, as he appeared on stage with the smartphone in his hand.

The sleek smartphone runs with Android 2.1, which Google said was more customizable than the version: this includes more space for “home-screen panels” or widgets, which can be cycled through by brushing your finger horizontally over the screen, like with an iPhone. Erick Tseng, a Google product manager, demonstrated the new operating system’s features on stage in Calif., including a neat function that can type your dictation right into the text of an email.

Mario Queiroz, Vice President of Product Management for Google, holds up the Nexus One smartphone running on the Google Android platform, the first mobile phone the internet company will sell directly to consumers, during a news conference at Google headquarters in Mountain View, California on January 5, 2010.

“What you really have is a mini-computer, sitting in your pocket,” Tseng said, repeatedly calling the Nexus One a “super phone” instead of a smart phone.

It also has a track-ball capable of flashing in different colours – white for a regular call, for example, or blue for an incoming Bluetooth – and a five megapixel camera.

At launch, the company is only shipping phones to the United States, the United Kingdom, Hong Kong and Singapore. “We’ll gradually roll it out,” a Google spokesperson told the Globe. “Right now, it’s a bit limited from a shipping perspective.”

However, since the phone operates on the GSM network with a SIM card, phones purchased in those countries could technically be used in Canada and elsewhere, Wendy Rozeluk, a Google Canada spokesperson, said. These phones wouldn’t connect to high speed 3G networks, she added.

The main purpose of the so-called Googlephone is to “carve out” Google’s stake in the mobile web-search market and its future advertising potential, said Deepak Chopra, a technology analyst with Genuity Capital Markets.

“If you take a look historically, handset manufacturers have developed their own operating systems,” Mr. Chopra said. “Google came along and realized a lot of the handset makers were lagging… (but) ultimately they want to drive traffic back to their search engine and drive mobile searches.”

Google, Mr. Chopra said, is likely expecting an acceleration of the current era, where advanced smartphones are increasingly displacing, or replacing, desktop PCs and laptops – many of which use the ubiquitous Google search engine.

The new phone marks an attempt by the company to muscle into the mobile market with a branded-phone and an increased emphasis on its own Android operating system.

“In the medium to long term,” Mr. Chopra added. “We have to believe that mobile search will become just as important as landline search. Google obviously recognizes that and they’re moving down that road map to make sure they carve out their space.”

Although there is an opportunity to make some money on phone sales, Andy Rubin, Google’s VP of engineering said the main point of Android is to move Google’s lucrative, user-tailored advertising strategy into the relatively still-new realm of mobile browsing.

“This is the next front of our core business,” he said. “This phone is looking a lot like your laptop did four or five years ago.”

Noting that smart phones were increasingly acting as a consumer’s computer of record, Mr. Rubin added that, “We’re trying to make sure a lot of people have great access to Google services… If you want the phone, you go to the store, you grab the device, and the advertising model takes off.”