What Does This Tech Giant Have Up Its Sleeve?

Meena is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Google (NASDAQ: GOOG) has been much talked about lately as we get into the dog days of summer. While Apple (NASDAQ: AAPL) has shed light on the fact that it won’t release any new devices until the fall (though we have heard rumors about summer releases, like this one), Google may be searching for the upper hand, so to speak.

The Nexus

There’s been much anticipation about the latest editions of Google’s Nexus devices, and the latest iteration of its Android OS. Oct. 5 is the specific date, believed to be the date that Google will unveil its new Nexus smartphone, the Nexus 5, which would also run on the new Android 5.0 Key Lime Pie OS. Many rumors discuss that this new device may be announced sometime next month.

What can we tell you about a new Nexus 5?

Well, as the name might suggest, the number indicates that it is a larger version of the Nexus 4 smartphone, and it is expected to boast a 5.2-inch full HD display. Theoretically, this would place it in the phablet space; the Nexus 5 is also expected to sport a quad-core Qualcomm Snapdragon 800 processor.

The smartphone is expected to house a 13-megapixel rear-facing camera and a 2MP front-facing lens, a 2,700mAh battery, 3 GB of RAM, and apparently, LTE capability. Interestingly, there’s also speculation that it would feature one of the thinnest bezels in the market to accommodate HD resolution, the larger screen size, and consumers’ overall desire for continued portability.

Now, it usually takes new devices to inspire Google to release its latest iteration of its OS, which of course would be the much-anticipated Android 5.0 Key Lime Pie.

A couple of new features that have been consistently rumored include a “Guest Mode” so that a user can loan his or her phone to another person without fear of losing important personal information or files; plus a partition-profile feature so a user can separate personal and work profiles on the phone -- something similar to the technology that BlackBerry (NASDAQ: BBRY) offers its users.

Can Google maintain its Android market share with the Nexus 5?

According to comScore, Google is in a very dominant position in its respective marketplaces, both in terms of search and smartphone technology. In the search engine world, Google sites hold 66.7% of the overall market, while all iterations of the tech giant’s Android OS hold 52.4% of the U.S. market. Regarding the latter, the Android platform outpaces Apple’s iOS (39.2%) and BlackBerry (4.8%) handily.

Assuming the Nexus 5 is released this fall, we’d expect it to compete with Apple’s next iPhone, as well as BlackBerry’s U10. We’d expect the rumored BlackBerry phablet to be a much closer competitor to the Nexus 5 compared to the iPhone, as Tim Cook has already stated his unwillingness to produce a larger-screen smartphone as long as quality “trade-offs” still existed.

While it’s tough to forecast margins of phablet devices -- they vary depending on the producer, and don't carry an overwhelming trend one way or the other -- you can’t doubt the popularity of the device type. According to IDC (via the Fool), “handsets with screens that are 5 inches or larger have exploded from 1.2 million in 2011 to 29.7 million in 2012.”

In Asia, the research company also expects (via AppleInsider) the phablet market to come close to triple its size from the beginning of 2013, by the end of this year. Kantar, meanwhile, has found that Google’s Android OS holds an absolutely dominant position in China’s OS marketplace, with 71.5% compared to Apple’s 23.6% share. BlackBerry holds just 0.2% of the market.

Final thoughts

So, for investors considering the possibility of Google as an investment, we’d have to call the possibility of a larger Nexus 5 device a net positive for the company’s stock price. Aside from the general allure that any new device has -- in addition to Android 5.0 Key Lime Pie -- we’re bullish on the fact that it may have a larger screen, which would appeal to a market that’s growing incredibly.

The fact that this phablet-type device is especially popular in China gives Google even more brownie points, particularly in comparison to Apple. We’ll also be watching BlackBerry’s speculated U10 very closely, but for now, that’s just a rumor. 

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This article is written by David Woodburn and Jake Mann. Insider Monkey's Editor-in-Chief is Meena Krishnamsetty. Meena has long positions in Apple and Google. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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