Well, it had already joined the war indirectly while launching the Android platform. Now with the launching of the Nexus One, it is in direct competition with the Iphone. One of the things that immediately struck me was that with the launching of the Nexus One; the product that will be most affected (WILL NOT BE THE IPHONE) but the recently Launched Motorola Droid.
I don’t understand the business sense behind launching the Nexus One just on the heels of the Motorola Droid. Yes the Droid is Motorola’s most superior handset yet. Heck it even was the best Android based phone until the Nexus One came along. It had the Google Navigation system, Google Voice Search and a very clear interface.
Now the Nexus One has all these capabilities of the Droid and also it is unlocked (even if you buy it with the T-Mobile/Verizon(coming soon) tie-in offer). So guess what people will be buying? a locked Droid or an unlocked Nexus One . Fake Steve Jobs nicely describes the whole scenario. Also here is Nexus vs Droid vs iPhone chart.
It is obvious that there will be a lot of competition within the Android space itself. I hope that just does not make them( viz.. HTC, Motorola) to shift their focus away from the main goal. i.e Giving Apple a chase for their money. 
. As much as unwieldy the Android platform is from a developers’ persepective; it surely the only alternative to the Iphone Platform right now.
Also, 2010 is going to be a coming of Age for Google. From just a search engine company challenging the likes of just Yahoo a decade ago, it has now grown to challenge bigger giants like Microsoft (with Chromium OS, Google Docs) and now Apple. Way to go Google !
Actually there are 2 points that rationalize the launch
- The Google phone is actually first try of another stunt by Google. Its trying to setup its own phonestore (http://www.google.com/phone) and appstore (like the iphone appstore). The phonestore would showcase all and sell phones with Google designed software irrespective of their manufactures, like for Nexus its HTC. Yes the Nexus phone itself is by HTC. This also might rest your fear that mainstream player (Like , Motorola etc.) to shift their focus away.
Now the question then why are not the Moto Droid and HTC Magic etc. other droid phones on the Google the phonestore. The story is like this, If HTC decides to make a android phone(i.e it downloads android and customizes and put it in its phones) its a HTC phone. If Google decides to use a HTC phone(i.e ties up with the manufacturer for a supply of phone barebones ), then its a Google phone and hence is on its website.
- Another point is if Google blog be followed regularly they had announced a launch in the beginning of this year quite some while before.
Yes the Nexus is manufactured by HTC. That still doesn’t explain why does Google need to have its own Phone when there are HTC/Motorola phones doing the same thing ?
One direction obviously where this could be heading is that; Android platform phones kill the other competition(Palm, Windows Mobile etc) . So there will be only 2 main platforms . Apple and Android. I get that part. Can these slew of Android phones ultimately challenge the might of Apple ? Time will tell.
Why does Google need to have a phone ? Good question. I find that is one trend that is sign of newer times. Its equal, open and generic market. If HTC can take Android base and put it on its TRIUS platform. Google can buy HTC’s commodity barebone TRIUS and put Android on it gets them some more money back they put into the Android. Why not?. I dream of the day when i can buy a mobile barebone from my local store and boot my choice os onto it.
By the way sales aren’t impressive enough :
http://www.techtree.com/India/News/Google_Nexus_Ones_First_Week_Sales_Weak/551-108725-893.html?utm_source=twitterfeed&utm_medium=twitter