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Google to unveil mobile strategy: sources
2007-11-03
Google Inc (GOOG.O) will unveil its mobile strategy on Monday, including a phone operating system and a broad alliance with multiple wireless service providers and handset vendors, people familiar with the matter said on Friday. Sources said the Google mobile operating system would be based on open-source Linux code, which will support applications from different software developers in addition to Google's own services, which include e-mail and mapping. Its partners include Sprint Nextel Corp (S.N), Deutsche Telekom's (DTEGn.DE) T-Mobile USA, Motorola Inc (MOT.N) and Samsung Electronics (005930.KS), sources said. The phones are expected to come on the market around the middle of 2008, said one person who was briefed on the plans. "What Google is trying to do is win the war for a much larger audience, that being the mobile device," said the person, who spoke on condition of anonymity. "Google has been frustrated with their efforts to date to go in and do what they want (in mobile)," the source added. "Now they're taking a different tactic, saying: 'Why don't we create a broader working group where we're the anchor?"' The alliance, which aims to boost mobile Web surfing, has more than 25 members, the source said. Noticeably absent, others said, is handset market leader Nokia Oyj (NOK1V.HE), which owns 47.9 percent of British software company Symbian -- a developer of operating systems for advanced cell phones. Google, which dominates Web search on desktop computers, has long said Internet use on cell phones would be key to its growth, but it has not yet been able to crack the market. Another person familiar with the matter said Google has to take a new approach and work with multiple partners if it wants its mobile offerings to work well on a large number of phones. Unlike the desktop computer, where Microsoft Corp's (MSFT.O) operating system dominates, cell phones run on multiple incompatible systems, often requiring application vendors to customize their software for each device. "If you're Google looking at the mobile environment, what you see really does not resemble what happens on the desktop, and the foundation to create that doesn't exist," another person familiar with the matter said. "Google doesn't necessarily want to be your phone ... but they would certainly like to extend their business model to your phone." Google shares soared past $700 this week, buoyed by media reports that it would soon break into the phone market. The stock ended up 1.1 percent at $711.25 on Nasdaq on Friday, and has gained 50 percent in the last six months, outperforming Yahoo Inc's (YHOO.O) 9 percent gain. Analysts, however, say Google may have to offer more concessions than it originally wanted to reach deals with the largest U.S. wireless companies, which prefer to keep control of their devices and features. For months, investors have speculated that Google might design an entire phone, like Apple Inc (AAPL.O) did with its iPhone. But unlike the iPod maker, Google does not have a big name in devices, so analysts expect it to try to popularize its mobile services with software rather than hardware. Google has been in talks with Verizon Wireless -- jointly owned by Verizon Communications (VZ.N) and Vodafone Group Plc (VOD.L) -- about putting Google applications on the phones it offers, people familiar with the matter said this week. Anian, a Reuters company that tracks industry trends for institutional investors, reported this summer that Google had engaged Taiwan's High Tech Computer Corp (2498.TW) to design a Linux software-based phone for launch in the first quarter. All the companies involved declined to comment.
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