Getting inside Google's gPhone

Olga Kharif
10 Sep 2007

Still coming to terms with Apple's iPhone invasion, the cellular industry now finds itself bracing for yet another intrusion by a mighty outsider bent on altering the way wireless does business. This time it's Google.

New signals and speculation about Google's (GOOG) mobile initiatives emerge daily, but with no clear proclamations as yet from the Web search leader. One day there's buzz that Google will follow Apple's (AAPL) lead by introducing its own mobile device, the gPhone. Next comes word the company has developed its own mobile operating system or Web browser. Against this uncertain backdrop, providers of wireless service, handsets, and software have been left to guess anxiously at Google's true intentions, not unlike children gathered about a campfire, scanning for monsters in the shadowy forest.

Google Platform‾

So what's really lurking behind those trees‾ A source familiar with the situation tells that Google may be preparing a new mobile platform, a would-be rival to the Nokia-dominated (NOK) Symbian OS, Microsoft's (MSFT) Windows Mobile, mobile Linux, Palm (PALM), and other operating systems.

The new operating system, which may be named gPhone, was developed in part with know-how Google acquired with a startup named Android in 2005. The platform is designed to enable lower-priced 'smartphones' featuring more robust Web browsing and multimedia applications. Most importantly for Google, it will work hand in glove with the company's mobile search engine and other Google applications that are already popular on personal computers. And it would allow Google to bring new applications to the wireless market faster. Google declined to confirm or deny this information.

A number of handset makers have already created prototypes of lower-cost phones based on the Google platform, the source says. These handsets, expected to sell for about $100, are being shopped around to carriers worldwide, including those in the U.S. On top of the lower price tag, Google also hopes to attract customers with the promise of lower monthly cell bills. But in Google style, that means users will have to agree to receive ads on their mobile phones, an approach that's enjoyed some limited success in certain trials by other companies with far less clout than Google. In effect, Google will attempt to introduce not just a new platform, but also a new business model for the wireless-services industry.

Yahoo's Mobile Search Success

This project marks just one of the many ambitious mobile initiatives Google has undertaken. The search giant has indicated it would likely bid in a federal auction to use new swaths of the public airwaves for wireless services. The plan would be to either build its own cellular network or to partner with another company to do so. All the while, Google keeps beefing up its arsenal of mobile applications. On Aug. 30, the U.S. Patent Office published a patent filed by a Google inventor for a mobile payment system designed to allow people to pay for goods and services via text messages. Consider also that Google currently has 67 openings on its Web site for mobile-related positions, mostly in wireless software development, and it becomes clear that something big is afoot.

It's easy to see why Google is turning so much energy toward wireless. The company generated nearly all of last year's $10.6 billion in revenue from online search advertising.

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