The Google Phone: The Story So Far and What's Next

The Wall Street Journal has been reporting on Google’s mobile phone efforts and how it is beginning to draw some interest from carriers, especially in the United States. Sprint (S) and Verizon (VZ) are in talks with Google (GOOG), according to the Journal, and an announcement by the company is expected sometime in November. Here is what I have been able to gather from my sources:

* An announcement will likely be made Nov. 13th or Nov. 18th.
* Handset makers will use a Google Mobile OS platform.
* Google Mobile OS uses a highly optimized Mobile Linux; developers will be able to use a Java Development Kit. Google is said to have developed a highly optimized Java running on top of the OS. (Read our previous post, Five Facts about Google Phone.)
* Most major handset makers, with the exception of Nokia (NOK), have devices with Google Mobile OS under development; Samsung and Motorola (MOT) are being linked to it as well. (as are HTC and LG Electronics, according to the Journal.)
* The operators who are likely to be part of the big announcement will be T-Mobile’s USA division and Bharti Airtel, one of India’s largest cellular carriers.

The increased interest on the part of mobile carriers is summed up best by Hamid Akhavan, CEO of T-Mobile International and CTO of Deutsche Telecom (DT). In a chat with Russell Reynolds Associates he said:

These companies have recognized that it is not an easy game to penetrate the wireless market without the help of the operators, which has led to collaborative relationships…The biggest challenge is to adapt our market perspective and business model to one based on partnerships, content and applications. Historically, wireless carriers had a relatively simple business model — end-to-end voice service — with correspondingly simple billing. That is no longer the case.

Carriers are grappling with this question, and this business model conflict is something that needs to be resolved quickly by Google. Akhavan points out…

When AT&T and Apple partner on the iPhone or T-Mobile partners with Google on mobile advertising, these new arrangements force the question: “Who pays whom and when?” Billing, payment and content management for broadcast, advertising, search and music all are significantly different. Carriers are having to develop new business models that are compatible with the changing business models of the other key players in the ecosystem. The business models have to be as interoperable as the technologies.

After talking extensively to the mobile industry insiders, I believe Google Mobile OS is going to become part of the new mobile ecosystem. More on that later tonight, once I get a chance to sit and write.

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