Why a $399 Galaxy Nexus from Google is a big deal

Google’s(s goog) flagship Android 4.0 phone, the Samsung Galaxy Nexus, is now available for direct purchase online in the Google Play store. The company added a new Devices section on the Google Play website, although for now there’s just one device. Google is selling the unlocked, no-contract GSM version of the Galaxy Nexus for $399. The phone accepts a SIM card and works for voice and HSPA+ data on either T-Mobile or AT&T (s t) in the U.S.; at this price, it’s a great deal.

The handset, which debuted to show off the Ice Cream Sandwich version of Android in October, will only be sold in the U.S., but that may change in the future based on this excerpt from a Google blog post:

“First available in the U.S., Galaxy Nexus costs $399 and arrives at your door unlocked, without a carrier commitment or contract. You can use it on the GSM network of your choice, including T-Mobile and AT&T. It also comes pre-installed with the Google Wallet app which lets you easily make purchases and redeem offers with a tap of your phone. Best of all, we’ll give you a $10 credit to get you started with your new mobile wallet.”

This isn’t the first time Google has directly sold a Nexus device to the public. In January of 2010, Google offered the Nexus One, another GSM handset, through the web for $529, with many hoping it would start a new era taking carrier control away from handset sales. That result wasn’t achieved, although there was still benefit to those, like myself, that purchased a phone direct from Google.

The Nexus One received software updates directly from Google, often far faster than other Android handsets, which get new software from the carrier, if at all. The Nexus One also helped spur many custom ROM efforts, allowing owners to run Android builds with the features and functions they wanted.

Earlier this week, I spoke with Google’s Director of Digital Content, Jamie Rosenberg about this development, asking if this was another attempt to wrest control from the carriers, but Rosenberg said the reason was otherwise. “We want to showcase the phone and Google Play,” he told me. “Yes, it’s another way for a consumer to buy a phone, but we see the Galaxy Nexus as a great endpoint for Google services.” And with 300 million cumulative Android devices now activated world-wide, that’s a lot of endpoints.

I noted that the new online store in Google Play is Devices — as in plural — and asked if other devices would be offered there. Google is rumored to be planning a low-cost Nexus tablet, possibly for its Google I/O developer event next month, but Rosenberg wouldn’t take the bait, saying there were “no other announcements at this time.”

Still, I can’t help but wonder if Google is really planning to give direct sales a full-on second attempt for two reasons: Google only controls the Android experience on devices that it sells direct and it has a hardware arm in Motorola (s mmi) once its purchase of that company takes place. Earlier this month, I suggested that Google could give a boost to both Android and ChromeOS through Motorola’s LapDock hardware. Selling that directly gives Google a chance to mold the customer experience.

While most consumers in the U.S. don’t buy their handsets outright, at $399 without contract the GSM Galaxy Nexus direct from Google is a steal. I paid $575 for this same phone in November, ordering it and having it shipped from the UK. I’ve already installed several custom ROMs and routinely swap SIM cards between T-Mobile and AT&T on it as needed, based on my coverage. And I also use it with a $30 monthly data-only SIM card with a VoIP client for free voice calls.

The 5 megapixel camera may be lacking compared to newer phones, but other than that, it’s as capable as any other Android device available today. Google Wallet works great with the NFC chip (see the experience here) and the pure Android 4.0 experience is vastly improved over the old software. Between the pure Google experience, 21 Mbps HSPA+ radio, a 4.65-inch, 1280 x 720 Super AMOLED display, dual-core processor and ability to work on two different U.S. networks — as well as those overseas — this may turn out to be the best Android deal of the year.