Internet giant Google Inc on Tuesday unveiled the `Nexus One' smartphone marking its entry into the expanding mobile phone market and posing a challenge to the dominance of Apple's iPhone in the notebook market. (See: Google to foray into smartphone space with ''GooglePhone'' launch)

The Nexus One is priced at $179 with a traditional carrier contract at the lower end and a steep $529 at the higher end.

The Google Nexus, intended as an answer to Apple Inc's `iPhone', is likely to hurt BlackBerry maker Research In Motion Ltd as well.

`Nexus One' has a larger screen than the iPhone, a sleeker design, a better camera and allows more talk time between battery charges. It also fares better in looks compared with even the latest in the BlackBerry smartphones.

With internet surfers increasingly using the handsets rather than PCs to scan the web, Google is also expected to increasingly use its Android software to protect its online ad empire.

The Nexus will first be rolled out in the US, the UK, Hong Kong and Singapore and will be also be on sale at www.google.com/phone.

Although Nexus One will be sold in the US initially through T-Mobile and in Europe through Vodafone, Google expects to sell more devices online and in the open market bypassing the carriers.

The Big 3 telecom companies in the US - Verizon, AT&T and Sprint Nextel - are reported to have spent $8.3 billion on advertising last year, mostly for marketing smartphones.

The Google Nexus One, however, is an unsubsidised smartphone - one that is not tied to a service contract - and marketing it that way will be tough job for an internet company that has no moorings in hardware sales.