Google gPhone rumors get louder
Published:31-October-2007
By BR staff writer
Google will announce within weeks cell-phone software that will run on any handset and will launch its own wireless handset by mid-2008, according to a report by The Wall Street Journal, which cited unnamed sources. The report echoed rumors that have been floating around for the past six months or so.
Last week, there were loud whispers at the CTIA tradeshow in San Francisco that Google had already signed up a handset manufacturer and would launch a phone, which pundits dub a gPhone, sometime next year. There also has been speculation the company is developing its own mobile operating system to enable more web pages, including Google's of course, to run natively on mobile devices.
The Journal article said Google's handset software would be designed to make Google's various applications run as smoothly on smartphones as they do on other clients, in order to boost its ad business in the wireless world.
Google has made no specific comments about a potential gPhone. When asked about the possibility of its own smartphone, during a conference call on October 18 to discuss its most recent quarterly results, Google president and co-founder Larry Page said there wasn't "a requirement" to do such a thing.
"Obviously we've grown a lot since we entered the search business and the opportunities that are available to us are different, and there are opportunities for us available in those kinds of spaces. And we would also love to get even greater numbers of people and wider access to our applications that we provide," Page said on the call. "So I think that it is more of an opportunity for us then a cost. We have tremendous usage of our current mobile applications and we have deals with very, very many different wireless carriers and so on, and many other types of carriers. I think those things will all continue."
Google has already developed a mobile version of its Google web search tool, as well as other mobile applications, some of which come bundled with handsets and others that are downloadable.
It is widely hoped that a gPhone would buck wireless trends in the US whereby users buy hardware from a carrier and are then bound to that carrier's network in order for the device to work.
Google's vision is to unshackle users from their carriers, and over the summer it pledged to bid at least $4.6bn in a forthcoming auction of newly available 700-megahertz wireless spectrum in the US if those airwaves were made open to all devices.
Google had asked for four so-called wholesale open-access provisions, but the Federal Communications Commission only approved half of them: that third-party resellers could buy wholesale wireless services from a licensee; and that rival broadband providers could interconnect to a licensee's wireless network.
Whether Google will still end up bidding on the spectrum, which will go up for auction at some point before January 28, is not yet known. Page said, on the recent earnings call, that Google was "quite happy" with the openness provisions the FCC has put into the 700-megahertz auction.
"I think we have many, many different options available to us as a company, in terms of spectrum and connectivity for people in wireless and so forth, so I don't think we feel like there's any desperate need for us to have to bid to win or anything like that," Page said.
Our View
Google clearly hopes to replicate its success with client search in the wireless arena. The company wants to be the No. 1 wireless search portal, but wireless carriers are standing in its way.
We remain somewhat skeptical about an impending gPhone, if only because there are substantial logistical uncertainties surrounding such a device. For example, it is unclear how Google would actually market and sell a smartphone.
If the FCC does grant licenses to open-access airwaves, Google must win all six geographic areas of that spectrum in order to have a nationwide network. Even if Google wins the lot, the open-access airwaves will represent just a portion of the wireless real estate in the US - about one-third - which hardly enough to make it lucrative for any company.
Fundamentally, it will be challenging for Google to jump into the smartphone handset market and navigate the carrier environment. Of course, that doesn't mean it won't happen. Google may not have the experience, but it has enough cash to stick around long enough to learn.
