Google is taking on Apple's iPhone directly with their own phone, which they introduced on Tuesday (January 5), called the Nexus One, the first smartphone completely designed by the search leader.

The new Nexus is currently only available with T-Mobile service, but Verizon Wireless and Vodafone is coming sometime this year. According to reports, Google plans to handle all sales online, so the phones will not be in retail stores.

It's available at Google.com/Phone for $179 with a two-year contract through T-Mobile, or you can buy it outright without service for $529.

It runs an updated version of Google's Android operating system, and was built by HTC from Google's direct specifications.

Here are some of the features:

• 3.7 inch touch-screen (800x480 pixels)
• 5 megapixel camera & flash (w/ 2X digital zoom)
• Android Mobile Technology Platform
• Qualcomm QSD 8250 1 GHz processor
• Bluetooth, Wi-Fi, GSM/EDGE
• 119mm x 59.8mm, weighs 130 grams

According to Google's specs, it has up to 7 hours of talk time, 250 hours of standby time, and up to 5 hours of internet use -- all while on 3G.

Other cool additions include: speech dictation, which lets you speak and compose e-mail messages, Twitter tweets and Facebook posts without typing.

Google tried to combat Apple's dominance with the iPhone with its Android operating system by offering it free to manufacturers and wireless carriers. While around 20 Android phones are available, few -- with the exception of the Verizon Droid (by Motorola) -- have given the iPhone any competition.

So, it took matters into its own hands by creating the Nexus One, and some feel they may be able to steal away some of Apple's marketshare with the new smartphone.

"It's the best Android to date," Charles Golvin, an analyst at Forrester Research, told USA Today.

Since its inception, Apple has sold nearly 30 million phones in 100 countries. Just this week, the company said iPhone and iPod Touch users have downloaded 3 billion applications since it the launch of the App Store, which boasts over 100,000 different applications for just about everything.

On Android phones, there's only about 10,000 apps.

But, with Google creating and endorsing it's own phone, things should pick up.

Golvin predicts Nexus One will sell "a couple million" phones this year and bigger market share. But for Google to push into more countries, and "that's going to take awhile."