It looks like the latest round of rumors regarding the Nexus One phone–you know, the official Google Phone–is that the device will cost $199. Snapdragon processor, WVGA capacitive touchscreen, and HTC’s “Quietly Brilliant” design doesn’t come cheap and the price is going this low because Google will be subsidizing the handset for use on T-Mobile USA.

If the rumor does in fact turn out to be true, the move by Google is interesting as it will be the first time a device manufacturer will alone subsidize the handset. Usually, carriers subsidize handsets to entice customers to hop on an expensive plan and the carriers will recoup the cost of the handset and earn a sizable profit at the end of a two-year term. Google’s move comes at a time when advertising is gaining ground on the mobile space and Google is hedging their profitability through ad revenues. Again, all of this is speculation at this point, but a $199 phone on a contract-free T-Mobile Even More Plus plan sounds delightful.

(via: Android and Me)