Remember when Google tried to sell their phone online, and it ended up being a huge flop? I remember it well, because the Nexus One is my current phone. It's an amazing phone, and those of us who bought one like it a lot. I've had two great years of use out of it.
However, Google's strategy to sell the phone exclusively online was a bit of a disaster. It turns out people like to see and touch phones before they purchase them. They like a customer service number they can contact if they have problems with their phone, and they're not always keen on buying an unlocked phone in the US. We Americans tend to prefer spreading out the cost of owning a new phone by paying more for our phone plans and being tied to a two year contract. That's something Google would rather change, and there were rumors that Google even considered selling the original Nexus One as a loss leader in order to accomplish it. They didn't, and the $530 price tag didn't help move sales.
Enter Galaxy Nexus
Google gave up on the Web store when it introduced the Nexus S by Samsung in late 2010. That phone went entirely through traditional channels in the US, and Google focused on hardware innovation.
The Galaxy Nexus was introduced in late 2011 initially only through Verizon in the US, and then in 2012 it was also rolled out on Sprint. Both of those are CDMA networks, so they don't take SIM cards. You can go the traditional route and purchase a phone through Verizon or Sprint with a two year contract. Meanwhile, Samsung made Galaxy Nexus phones that would work on T-Mobile and AT&T's GSM networks. They just didn't offer them for sale here. You could buy imported phones, and some people did, but imported phones were more expensive.
Finally, in April 2012, Google started selling unlocked GSM Galaxy Nexus phones through Google Play.
This Time It's Different
Google has learned a lot of lessons since the first time they sold phones. The price is lower at $399. (Be warned. That total does not include shipping. My total came to $440.) There's a phone number you can use for support, and a quick link to check on your order status. Those features were lacking the first time around.
You also use the same payment method (Google Wallet) that you'd use for purchasing apps through Google Play. That was the same for the Nexus One, but enough time has passed that customers are familiar with this purchasing method. Time probably helped a lot of Google's problems with Web sales. Customers buying a replacement or upgrade Android phone are going to be a whole lot more comfortable with the process.
There's no way to order custom engraving, a feature that was offered on the Nexus One, but it was also a feature full of pitfalls. You couldn't return a phone you'd had engraved, and it slowed down the whole ordering and delivery process.
Devices
The Galaxy Nexus is currently the only physical good sold through Google Play, but it's in a separate section labeled Shop Devices, indicated that it won't always be the only physical good sold there. It's entirely possible Google will take a page from Amazon and start selling cheap tablets in order to sell more virtual goods through Google Play.
Why Galaxy Nexus?
Aside from the fact that the Galaxy Nexus offers impressive hardware features, like NFC, 4G speeds, and a front-facing camera, it offers a "pure Google" experience. Android 4.0 (Ice Cream Sandwich) was targeted specifically for this device. Other phones need to have their Android modified slightly for differences in hardware. That's not a big deal, but "slightly" has become "considerably" over time, so the Android you find on most phones has a different user interface. Carriers often insist on some features being disabled, and they may even add a few things you'd rather not have. Some Android phones have Bing installed as the default search engine, for instance. You also need to wait longer for Android updates, since each updated version of Android has to have the same modifications.
So if you want to be first in line for Google updates and know that your carrier hasn't mucked about with the software on your phone, the only way to do that is to bring your phone to the carrier instead of buying it from them. Google hopes you'll see Google Play as a way to do that.
