Google on Tuesday unveiled a web store hosted by the search engine giant and a super-smartphone called the Nexus One, which combines the latest in hardware from HTC of Taiwan with the newest Android software. It will compete with Apple's iPhone and Research in Motion's BlackBerry and it will be unlocked, via the web with opportunities for multiple carriers to compete to sell service plans and subsidised versions of the hardware.

Google said the goal of its new consumer channel is to provide an efficient way to connect Google's online users with selected Android phones. The online experience of the web store has been designed with a focus on simplicity.

Through the web store found at www.google.com/phone, consumers can buy the Nexus One without service (meaning any GSM network SIM card can be inserted into the device), or purchase the phone with service from one of Google's operator partners. As new phones come to market through this channel, Google says consumers will benefit from the ability to match a phone of their choice with the service plan that best meets their needs. Operator prices and plan details will be featured on the site.

"The Nexus One belongs in the emerging class of devices which we call ‘superphones,’ with the 1GHz Qualcomm Snapdragon chipset making it as powerful as your laptop computer of three to four years ago. It's our way to raise the bar on what's possible when it comes to creating the best mobile experience for consumers," said Andy Rubin, VP of Engineering."We look forward to working with handset manufacturers and operators to bring more phones to market through this channel worldwide."

Nexus One is initially available from the Google web store in the US without service for $529 or starting at $179 with a two-year contract from T-Mobile USA. In the near future, Verizon Wireless in the US and Vodafone in Europe plan to offer services to customers in their respective regions.

The company plans to sell the costlier, unsubsidised version to consumers in the UK, Hong Kong and Singapore immediately. Like Americans who buy this unlocked version, these customers will have to purchase carrier service separately, something they should be able to obtain right away by just buying and inserting a SIM card from a carrier with compatible technology.

"I’ve been testing the Nexus One for a couple of weeks and I like it a lot. It’s the best Android phone so far, in my view, and the first I could consider carrying as my everyday hand-held computer. It is a svelte gray device with a 3.7-inch, high-resolution screen; a thin strip of buttons underneath for home, back, menu and search; and a trackball," Walt Mossberg, who writes on technology for The Wall Street Journal, says on his site - - read the full review.

Smartphones, which have PC-like functionality, captured around 17 percent of the US market in 2009, up from 11 percent at the end of 2008 and 7 percent at the end of 2007.

Q3 2009 data

A look at Google's answer to the iPhone, with CNBC's Jim Goldman:

Mario Queiroz, VP of Product Managementat Google:

"We first executed on this vision a little over a year ago, when we launched Android on one device with one operator in one country. Today, we have 20 devices with 59 operators in 48 countries and 19 languages. And because Android is free and open source, it continues to flourish. Android allows devices to be built faster, and at lower cost. And anyone can build anything on top of the platform. This ultimately benefits users.

To help adapt Android to the needs of consumers, we apply our engineering resources to selected projects with handset makers and operators. Together we have improved the rate and pace of innovation in mobile phones. The volume and variety of Android devices today has exceeded even our most optimistic expectations. And we believe we can accelerate the pace of innovation further. So we thought: What if we work even more closely with our partners to create devices which showcase some of the great software technology we've been working on? And what if we make those devices available for purchase through a new, simple online web store from Google?

Well, today we're pleased to announce a new way for consumers to purchase a mobile phone through a Google hosted web store. The goal of this new consumer channel is to provide an efficient way to connect Google's online users with selected Android devices. We also want to make the overall user experience simple: a simple purchasing process, simple service plans from operators, simple and worry-free delivery and start-up.

The first phone we'll be selling through this new web store is the Nexus One  -- a convergence point for mobile technology, apps and the Internet. Nexus One is an exemplar of what's possible on mobile devices through Android — when cool apps meet a fast, bright and connected computer that fits in your pocket. The Nexus One belongs in the emerging class of devices which we call "superphones." It's the first in what we expect to be a series of products which we will bring to market with our operator and hardware partners and sell through our online store.

Manufactured by HTC, the Nexus One features dynamic noise suppression from Audience, Inc., a large 3.7" OLED display for deep contrast and brilliant colors and a 1GHz Qualcomm Snapdragon™ chipset for blazing speeds. Running on Android 2.1, the newest version of Eclair, the software includes innovations like a voice-enabled keyboard so you can speak into any text field, fun Live Wallpapers, a 3D photo gallery for richer media experiences and lots more. Of course, it also comes with a host of popular Google applications, including Gmail, Google Voice and Google Maps Navigation.

Today, the web store allows you to purchase the Nexus One without operator service or with service from T-Mobile USA. We expect to add more operators, more devices and more countries in the future, including Verizon Wireless in the U.S. and Vodafone in Europe. To learn more about the Nexus One, and our new web store, we recommend checking it out for yourself by visiting www.google.com/phone. We look forward to seeing how our new program and the Nexus One contributes to accelerating innovation on mobile products for the benefit of users worldwide."

Discussing the smartphone wars, with Jim Friedland, Cowen & Company and Peter Misek, Canaccord Adams and CNBC's Jim Goldman: