'Gphone' rumours hit fever pitch

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Elinor Mills CNET News

Published: 25 Oct 2007 12:24 BST

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Searching for the Google phone is a lot like hunting a yeti.

Rumours of a Google phone, or "Gphone" for short, have circulated since late 2004 and hit a fever pitch over the last few months, according to a handy chronology on the Search Engine Land blog.

There's speculation that Google might drop some hints on the subject at its analyst day on Wednesday, but until now Google executives and spokespeople have refused to comment on or confirm if "Gphone" is the name of the product many believe the search giant to be working on.

Often, where there's smoke there's fire. And what do the smoke signals — and Google patents — say? Unlike Apple's iPhone, the Gphone probably won't be an actual hardware device. Instead, it's more likely to be a bundle of software and supporting infrastructure that allows a phone manufactured by someone else to access Google services, experts have said.

Google will probably partner with France Telecom's mobile-telephony division, Orange, and KDDI in Japan, said Stephen Arnold, author of The Google Legacy and a new book, Google Version 2.0: The Calculating Predator. Arnold has researched Google's patents and found more than a dozen that relate to mobile telephony.

"There is going to be a Google phone as a reference device, probably more than one," Arnold said. "They will hook into the Googleplex to deliver functionality that ranges from 'search without search' [information that anticipates what someone may be looking for], to mapping and calendar services. Google is positioned to move different ways in response to market behaviour."

UBS analyst Arthur Hsieh said he believes that, by the year's end, Taiwanese handset maker HTC will ship 50,000 or so handsets to developers with the Gphone operating system, according to a recent research note. That's a sliver of the nearly 1.4 million iPhones that have been sold so far, of course, but it's a start.

It's likely the Gphone will be advertising-supported, given that the company has filed a patent application for advertising-supported telephony, Arnold said. Not only has Google chief executive Eric Schmidt expressed interest in the notion of subsidising the cost of phones with advertising, but the company offers ads on its mobile applications today, said Greg Sterling, principal at Sterling Market Intelligence.

Look for applications like "search, mapping, communications, like Google Talk instant messaging" with ads, said Charles Golvin, an analyst at Forrester Research. "That's their business model: selling ads."

Don't expect a fancy touch-screen interface that would compete with Google partner Apple's iPhone and drive up the cost of the Gphone, experts said. Google may try to release a better version of the Windows Mobile device, only cheaper. If the iPhone is a Lexus, the Gphone will probably be a Honda, particularly if it's supported by advertising.

Offering a low-cost or subsidised device would also fit in with the company's strategy to leapfrog with wireless technology in emerging markets, analysts said. "There are going to be a billion or more mobile-phone subscribers in the next few years, and these are people who not only have never used a mobile phone before but also have never used the internet before," Golvin said. "Their first experience of the internet is likely to be on a mobile phone, not a PC."

"I tend to feel it will be an operating system and they'll partner with a handset company," said Danny Sullivan, editor of Search Engine Land. "There will be a Google phone. It will be mini-computer-like, the same way that the Windows Mobile device is."

There also has been much speculation that the Gphone will run a Linux-based operating system. "Google's inclination would be to make it more useful than just a phone with internet access," Sterling said. "That seems culturally consistent with the interests of the Google founders. They want to see lots of interesting uses and extensions of it."

And what might those extended uses be? According to patent filings, Google is aiming to allow the phone to become a virtual machine that would connect to a keyboard and display, Arnold said.

The Gphone could also eventually be used to help locate and monitor movements of troops in battle and transmit maps and other critical information to them, Arnold said, referring to another patent. Perhaps it could be a phone with medical uses that could monitor your heart and pulse and call emergency personnel if you have a heart attack, or alert you to less severe activity, he said.

In another patent, Google envisions phones serving as individual nodes on a large mesh network that can be used to receive and transmit all kinds of data in all directions, according to Arnold.

Whether Google wants to merely extend its lucrative advertising business model to the wireless space, or whether it wants to create software and services that underlie a multi-function device, there's no doubt the company sees mobile telephony as a vital market.

"Google is a bit anxious about accelerating its mobile market," Sterling said. "Their multi-faceted approach with voice applications, the potential [bidding for wireless] spectrum licences, lobbying on behalf of open networks, the development of software, the potential emergence of a Google Phone, all represents a pretty aggressive push which would suggest that they see urgency here."

Google's potential bid on the 700MHz wireless spectrum poses a serious threat to mobile telephony carriers who worry that the search company will transmogrify into a service provider. "It feels like Google is trying to be a disruptive force in the cellular industry in the US to potentially drive behaviour change," said Derek Brown, an analyst at Cantor Fitzgerald.

Of course, that's speculation as well, at least until a Gphone actually turns up in the wild.

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