There's a distinct possibility that Google (GOOGL 10.22%) could be preparing to unveil its newest Nexus smartphone as soon as tomorrow, according to a recent round of rumors. This follows the Nexus 7 that was updated a few months ago. The previous Nexus 4's biggest weakness was its lack of LTE support, which is a key competitive feature in today's smartphone market. Google didn't include it last year for political and technical reasons, but Google has probably overcome these challenges by now.
Nexus hardware sales are included in Google's "other revenues" segment. This segment has grown significantly in recent times and generated just over $1 billion in revenue last quarter, yet remains relatively small at just 7% of total sales. Instead, Nexus' importance comes in its strategic implications on the broader Android ecosystem. In addition, Google will probably launch Android 4.4 KitKat alongside the new device, which will slowly make its way throughout the platform.
Still, the Nexus 5 won't be a major threat to rivals such as Apple (AAPL -0.35%), because Apple mainly competes in a higher market segment. The Nexus 5's pricing advantage doesn't do much good in the U.S. because of the presence of carrier subsidies, but it could make a dent in emerging markets. However, Apple's much more concerned with Android OEMs like Samsung in those regions.
In this segment of Tech Teardown, Erin Kennedy discusses the Nexus 5 with Evan Niu, CFA.
