Google jumps into cell phone world

Internet search leader confirms rumors that it's developing a free cell phone software package to allow advertisers to reach mobile customers.

Confirming its long-rumored foray into the mobile market, Google said Monday it is developing a free cell phone software package so the Internet search leader can more easily peddle ads and services to people who aren't in front of a PC.

While the announcement ended months of speculation about the Mountain View-based company's cellular ambitions, the first phones equipped with Google's so-called "software stack" still won't be available until the second half of 2008.

And Google won't be making the phones, nor does it plan to stamp its prized brand on the devices. Instead, it will work with four cell phone manufacturers who have agreed to use Google's programs in their handsets. Consumers will have to buy a new phone to get the Google software because the bundle wasn't made for existing handsets.

Engineers have been working on the software for three years, dating back to a Silicon Valley startup called Android that Google acquired in 2005. The mobile software still bears the Android name in acknowledgment of its heritage.

"This is going to bring the Internet into cell phones in a very cool way," promised Andy Rubin, an Android co-founder who is now Google's director of mobile platforms.

Even with its market debut months away, Google's software looms as a significant threat to other mobile operating systems made by Microsoft , Research In Motion (Charts), Palm and Symbian, which is owned by Nokia and several other major phone makers.

Because Google's software will be free, it could undercut rivals who charge handset makers to install their operating systems. It also promises to make smart phones less expensive since manufacturers won't have to pay for software.

Google's system will also be based on computer code that can be openly distributed among programmers. That, Google hopes, will encourage developers to create new applications and other software improvements that could spawn new uses for smart phones.

"This is a shot that is going to be heard around the world, but it's just the first shot in what is going to be a very protracted battle in the next frontier of the mobile Web," said Michael Gartenberg, a Jupiter Research vice president.

So far, Motorola , Samsung Electronics Co., HTC and LG Electronics Inc. have agreed to use Google's software in some of their phones. Both Motorola and Samsung already buy Microsoft's Windows Mobile in some of their phones.

The list of wireless carriers that have agreed to provide service for the Google-powered phone in the United States include Sprint Nextel and Deutsche Telekom's T-Mobile in the United States. China Mobile, Telefonica in Spain and Telecom Italia are among the carriers that have signed on to provide service outside the United States.

They are among a Google-led group of 34 companies that have formed the Open Handset Alliance. Other key players include major chip makers like Intel Corp., Qualcomm Inc., Texas Instruments Inc., Broadcom Corp. and Nvidia Corp.

"This partnership will help unleash the potential of mobile technology for billions of users around the world," said Eric Schmidt, Google's chief executive.

Some key details, like pricing and how many phones will be shipped next year, have yet to be worked out.

Source - CNNMoney