So Much for That Free Google Phone Idea

A quick update on the Nexus One, the Android phone Google will likely uncrate at the Jan. 5 media event announced yesterday. According to documents leaked to Gizmodo, Google plans to sell the device unlocked and unsubsidized for $530 or with a two-year T-Mobile contract for $179.99.

If these documents are legitimate, they would appear to confirm that Google (GOOG) does indeed hope to rebalance the wireless market power structure, disintermediating carriers by selling the Nexus One directly to users, who will be allowed to choose the wireless provider of their choice.

But that $530 price point is a bit daunting, and it seems unlikely that many customers will be eager to pay it upfront–even if they’re given a post-purchase carrier subsidy once they select a provider and a wireless contract. So while the Nexus One might shake up the current wireless market model a bit, it’s probably not going to upend the market as it might have had Google opted to sell the device at cost or subsidize it with online advertising.

Google’s plan, may, however, set the bar for how an Android phone should be done and set the stage for some much improved second-generation Android devices.