Google's Nexus 5: What to Expect

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Finally, the BIG question: Motorola

To date, Google's Nexus program has been tiny in relation to Android as a whole. It's also been one where Google has been praying to the "God of fairness," promising that its own internal hardware department magically isn't going to get some sort of leg up, compared to HTC, Samsung, LG or others. Google has been more Catholic than the Pope in its dealings with its (mostly Asian) OEM partners.

Well, this highly defensive and conservative Nexus equilibrium must change. It's the equivalent to Roosevelt and Truman not choosing to build or deploy the atom bomb. Google is fighting the smartphone war with one arm -- and one leg -- tied behind its back. And when you're fighting against Apple and Microsoft (MSFT) , that's something you can't afford.

So what could this mean?

One possible scenario could be that the Nexus program continues seemingly unchanged, but that Motorola's new devices launched in 2013 will be de-facto Nexus devices but simply be called something else. This way, Google gets around the political conflict using tried-and-true semantics: "It's not a tax; it's a fee."

Bottom line: The Nexus 5 is mostly about cost reduction and simplification. The price will be driven down, perhaps eventually approaching $199 unsubsidized. Furthermore, a "second" de-facto Nexus line could be launched from the Motorola division, but would be called something else so as to avoid a peculiar form of "channel conflict."

We will know more on May 15.

At the time of publication the author had a position in AAPL, GOOG and QCOM.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.