Google threatened to leave the China if it couldn't provide uncensored search results there. The comments came after Google posted fourth-quarter earnings Thursday. Investors greeted the less-than-dazzling sales by selling the stock. Google was down 5% in after-hours trading. Later on the conference call, analysts asked about the role of Google's Nexus One phone and the potential for it to step on the toes of its telco and phone manufacturing partners. Schmidt emphasized that the company's approach was geared toward selling Android phones to consumers and less about a single phone. "Nexus One is about a new way of buying a phone," said Schmidt. "It doesn't exclude other models."
And as for hurt feelings among telcos, Schmidt said there were no problems to report. "For the most part," said Schmidt, "our partners understand the message and are OK with it." Apple ( AAPL) would seem to disagree. After watching Google's Android phones launch at nearly every U.S. carrier, as a competitor to the iPhone, Apple has reportedly started discussions to replace Google with Microsoft's Bing as the search service. -- Reported by Scott Moritz in New York.