There’s more to Google’s mobile strategy than just the handset, retail.

Well it’s official, the Google Nexus One is here and it’s here to take on Apple. But what does this new smartphone mean for mobile phone market?

Google said at yesterday’s launch that the Nexus One is only the first Google phone of many, with one store to sell them all – the Google Store.

The idea of the Google phone store is simple. Buy the handset you want, then shop for the price plan you want, from the carrier you want.
That’s right, soon they’ll be no more wars over distribution as there was for, say the iPhone (which went to O2 in the UK). 

However, the current Nexus One is so far only to be available through T-Mobile. But Google hopes to expand its online phone store by selling more phones, from Google and other companies, each with a choice of operators. It’s a noble ambition, to really shake things up, to put some fear into the entrenched industry players – and of course, one step closer to total world domination – if an online store succeeds then it will take control of distribution away from the mobile operators.

It is interesting that Google has been getting more involved in shaping the user experience on Android handsets. But the real story is in the distribution. The new phone is really intended to draw traffic to a new online Google phone store. It will be tested first in the US, UK, Hong Kong and Singapore, but eventually extend to many more countries and cover multiple handsets and service plans from many different operators.

Google is getting into retail with the chance that it can nudge more phone purchases online, and can use this both to extend the reach of Android faster while at the same time neutralising one of Apple’s key differentiators – the real-world Apple stores.

Google may or may not be right about people’s willingness to buy phones without touching them first (the Nexus One is only available online) but it doesn’t seem a big risk to take, and it could be one way to outflank the iPhone – or at least give Apple something else to worry about.

One further advantage of bringing people to a Google store is the chance to integrate a phone purchase with Google Checkout giving Google a credit card number and a relationship with a phone customer – useful things for the future as it tries to build a market around its online application store.

Countering the iPhone is an overriding priority for much of the mobile world right now. Vodafone needs an answer to the iPhone in Europe, and the buzz around Nexus suggests this is the closest thing yet. Microsoft’s execution in mobile software has been floundering, and Google is the best alternative to Apple right now.