NEW YORK (Trefis) -- Google's (GOOG) - Get Report new phone, Nexus S, went on sale starting December 16. Google entered the smartphone market in January 2010 with the launch of Nexus One. However, Nexus One failed to impress and Google announced that it will no longer sell Nexus One through its online store. The company is taking a different strategy this time with Nexus S, having teamed up with Best Buy (BBY) - Get Report and T-Mobile, as the company aims to leverage Android's increasing adoption.

We believe Google's sustained interest may be a sign that the company is still serious about its plans to tap into the booming smartphone market, and compete with rivals like

Apple

(AAPL) - Get Report

,

Research in Motion

(RIMM)

and

Nokia

(NOK) - Get Report

. If Google could produce the same success that Apple produced in the first three years of iPhone's launch, and RIM produced in the first 8 years of BlackBerry's launch, there could be an upside of more than 10% to the

$632 Trefis price estimate for Google's stock

.

Nexus One: Small Piece of the Pie

Google's Nexus One phone only contributes about 1% to our $632 price estimate. We believe that Google will be able to sell around 1 million smartphones in 2010, which includes 100,000 Nexus One units sold in the first three months of its launch. We believe that upcoming holiday sales, combined with Google's partnership with Best Buy and T-Mobile, could boost sales of the new Nexus S for the rest of 2010. In terms of market share, we estimate that Google's share will be around 0.1% for 2010 and could close in on 0.4% by the end of Trefis forecast period.

Could Google See Upside in its Phone Operations?

It is evident that with the launch of Nexus S, Google is serious about its plans in the smartphone market. Although we are currently conservative on Google's phone operations, there could be substantial upside to Google's stock, if it follows in the footsteps of Apple and RIM, as mentioned above.

Apple's iPhone was launched in 2007, and is expected to achieve a share of nearly 4% in the global mobile phone market during 2010. Similarly, RIM's BlackBerry is expected to achieve a similar market share of almost 4% by 2010. To demonstrate Google's stock value sensitivity to mobile phone market share, we estimate upside of roughly 10% to

our $632 price estimate

should Google succeed in increasing its market share to almost 4% by the end of the Trefis forecast period.

Modify the trend line in the chart above to assess the impact of various mobile market share scenarios on Google's stock value.

Can Nexus S Be a Winner?

Google is coming out with a different strategy this time to sell Nexus S phones. In addition to selling it unlocked for $529, it will be sold for $199 with a two-year contract from T-Mobile. It will also be sold exclusively at Best Buy stores and on its Web site.

In addition to the different strategy, Nexus S will be introduced with a few new features like front and rear facing cameras allowing the user to make video calls. Nexus S will be powered by Android's latest version, Gingerbread, which is reportedly faster than Android's previous version. Gingerbread features support for so-called near field communications (NFC) technology, which enables third-party developers to create mobile payment applications so users can use their phones as digital wallets.

See our complete

analysis for Google here

.

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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.