[30 August 2007]
San Jose Mercury News (MCT)
SAN JOSE, Calif.—It has been a long, dry summer for technology bloggers—even those based far from California.
Since Apple’s release of the iPhone on June 29, there has been precious little gadget news worth googling. Into the breach stepped Google itself, with its own hot story: not the iPhone but the “gPhone.”
According to bloggers with some credibility, Google is developing mobile software around a Linux-based OS that could be unveiled in some form after Labor Day.
“From what we’ve heard Google isn’t necessarily working on hardware of its own, but is definitely working ... to put the Gphone OS on upcoming devices,” Engadget wrote Tuesday.
Google issued a statement saying it would not comment on rumors. However, in May, Chief Executive Eric Schmidt told a group of reporters having lunch at the company’s headquarters that Google was indeed developing all kinds of mobile phone software.
“We are working to make the mobile stack more powerful through a lot of initiatives,” Schmidt said. “We have a lot of software that is getting added to phones and platforms.”
Kevin Burden, senior manager for mobile devices at Telephia, a research firm, said a Google-branded phone could be a winner if consumers believed it was the best way to surf the Internet.
“They should get a lot of attention,” he said.
So far Google has had mixed success integrating its software into existing phones. Outside the United States, Google search technology was adopted by Vodafone, China Mobile, NTT DoCoMo and KDDI in Japan, Bharti Airtel in India and T-Mobile in Europe.
Inside the United States, Google’s search is incorporated into exactly one phone—Motorola’s Moto Razr2—though users can still access Google by going to a mobile Web page or downloading applications that include search, maps, email and YouTube.
Burden said Google needs to win over U.S. carriers in order to secure a deal with a manufacturer.
Earlier this month, the Wall Street Journal reported that Google had shown a prototype of a phone with its mobile software to AT&T, T-Mobile USA, a unit of Deutsche Telekom, and Verizon Wireless, a joint venture of Verizon Communications and Vodafone Group. Still, no deal appears to have been struck.
Verizon Wireless Chief Executive Lowell McAdam told the Wall Street Journal his company would not integrate Google’s search software because Google wanted “a disproportionate share” of search-based advertising revenue.
“What this really boils down to is a battle for the mobile ad dollar,” McAdam said. He did not comment specifically on any Google phones, the newspaper said.
U.S. carriers, in general, are wary of Google. After investing billions in wireless networks, they fear Google will find a way to siphon off revenues they feel are rightfully theirs.
The carriers have also criticized Google for its actions during debate over the rules for an auction of newly available wireless spectrum. They say Google tried to force its way onto their networks for free.
Schmidt has since indicated that Google will probably participate in the auction, with the possibility it would operate a wireless service itself.
Scott Cleland, president of Precursor, said he was struggling to find the logic behind the gPhone rumor.
“Getting into the phone handset business or the wireless network business would radically change Google’s business model,” he said. “These forays into communications are cost sinkholes that will inevitably drag down Google’s margin. They will be spending like a drunken sailor.”