Google CEO Previews Wireless Device. Was It the Nexus S?

SAN FRANCISCO -- What's coming next from Google? The search giant's CEO Eric Schmidt didn't completely tip his hand, but he did show off "an unannounced product I carry around with me" during an onstage interview, here at the kickoff to the Web 2.0 Summit late Monday afternoon.

What Schmidt showed was a sleek black smartphone with any product name or logos covered over. On startup it connected via the T-Mobile network, a longtime Google (NASDAQ: GOOG) partner. But it was what was inside the phone, a near field communications (NFC) chip, that Schmidt seemed excited to talk about. He said NFC chips will be supported by the next release of the Android OS, codenamed Gingerbread, due out in a few weeks.

Schmidt predicted that someday smartphones embedded with an NFC chip would replace the need for credit cards. He said the NFC chip enables a "tap and pay" model where users simply tap the phone to a compatible credit reader to make a payment.

"It's interesting because the credit card industry thinks the loss rate will be much better with NFC devices," said Schmidt.

"It's got a higher level of authentication than the mag strip does," he added during a press conference after his appearance on stage.

Schmidt said he thinks NFC will be a ripe area for developers to create new location-based mobile applications. He was careful to note that user's should always be given the option to enable location-based services. But once enabled, he could imagine location-based services that respond to user's preferences in real-time.

"If you're walking down the street, the device could be doing autonomous searches so, for example, if it knows I like history, it shows me the history of different buildings as I walk by," he said. He also mentioned the advantages of adding a social layer using a service like Google Latitude to see where your friends are relative to your location.

A Google Nexus S phone?

Schmidt wouldn't comment on whether his company would release a branded phone with the NFC chip embedded. Google previously had released the short-lived Nexus One, which came with advanced features quickly adopted by Google partners like Motorola with its Droid smartphone.

Google considers the Nexus One a success from the point of view of providing a reference design for partners to follow. "We see ourselves as technology providers," said Schmidt.

Earlier this year, he said there would never be a "Nexus 2," but pushed on whether the device he showed Monday would be another in the Nexus line, he said "I said there never be a Nexus '2,' emphasizing the '2.' Recent reports have speculated the company will release a new device called the Nexus S.

On other topics, Schmidt said Android's success is usually measured by how well the devices compare to the iPhone. "As a former proud member of the Apple (NASDAQ: AAPL) board of directors, I can say there is a set of things Apple did with the iPhone, including a brilliant design and the App Store," he said.

Android devices have a chance to be a leading, if not the leading mobile device platform, Schmidt added, but he credits Apple for leading the App Store model. "The application space is the next area for us" to grow," he said. "Looking back, it would have been good if we had done more earlier with apps."

David Needle is the West Coast bureau chief at InternetNews.com, the news service of Internet.com, the network for technology professionals.