How the Google Phone Will Work

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Introduction to How the Google Phone Will Work

You can find rumors and speculation running rampant across the Internet on what may be the next big player in the $127 billion wireless market: Google [source: CNN Money]. Some believe Google will soon offer a phone running on a custom-built operating system (OS), with software like Google Calendars, Google Maps, Google Earth and Gmail -- Google's webmail -- along with standard phone functions. Others believe that Google will only offer the OS itself to existing cell-phone manufacturers, or that the company will become the next phone network administrator, competing directly against companies like AT&T and T-Mobile.

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Will there be a Google Phone?

It seems like the only people who know for sure are those who work for Google, and they aren't talking. But that hasn't stopped analysts, journalists and bloggers from writing about what they think Google has planned for the mobile device market. But before we venture into wild guesswork, let's look at what we know for a fact:

Google purchased Android, a software company that makes software for mobile devices.
Google filed a patent for a mobile payment processing system called Gpay.
Google purchased Zingku and Jaiku, two companies that provide social networking services. Zingku offers applications for text messaging, sharing pictures, instant messaging and other networking features. Jaiku is a microblog site like Twitter, allowing users to post and read messages with friends.
Google has expressed interest in bidding in the FCC's upcoming 700-MHz auction with the minimum reserve of $4.6 billion and the stipulation that the FCC agree to its "open devices" terms. This auction will sell off commercial blocks of bandwidth in the 700 MHz frequency. Google executives say they want the mobile phone market to become more competitive, allowing customers to buy any handset and use it with any phone service or operating system.
Google is working on creating mobile device versions of its applications.
Google continues to lead the market of Internet-based advertising.

Video Gallery: Google on the Brain
Join Marshall Brain as he discusses the upcoming Google Phone in this HowStuffWorks video.

In the next section, we'll look at some common Google Phone rumors.

Google Phone Speculation

Now let's take a look at some wild guesses, which range from wishful thinking to reasonable deduction. Some people think that Google is preparing to enter the mobile device market and that it will soon offer a device as a direct competitor to Apple's iPhone. These speculators believe the Google Phone (or Gphone as some are calling it) would have a large touch screen and would run on either an OS designed by Google, an OS based on Symbian (the most common smartphone OS) or Linux. Google would integrate applications like Google maps into the phone with a GPS system, making it easy to see where you are (or share your location with others).

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Google may concentrate on tweaking applications like Google Messenger for existing phones rather than make its own hardware.

In the next section, we'll look at the role Internet advertising could play in Google's mobile phone strategy.

The Open Device DebateThe FCC's auction of the 700-MHz band is the center of a public battle waged between Google and Verizon. The debate is whether the FCC has the authority to designate that band as an open application, open-device band. Open applications means that customers would be able to download any application they wanted to their handheld device. If the band is designated as an open-device band, it would mean customers could use any handheld devices for any wireless network that used the 700 MHz band. In other words, they would no longer have to rely on a limited (and sometimes exclusive) range of phones from a service provider. Google supports the FCC's position, but Verizon disputes it, claiming that the FCC is acting beyond the scope of its authority.

Google Phones and Advertising

Google's leverage in Internet advertising might mean that offering an all-in-one cellular phone could be significantly less expensive than an iPhone, perhaps even free. Industry watchers believe that advertisers would offset the phone's cost, making the Google Phone an entirely new business model in the mobile device market. Instead of collecting fees from customers, Google would collect revenue from advertising sources. Companies could pay Google to have their results pop up first whenever you use your phone to search for something, like a nearby sushi restaurant or hotel. A few bloggers even think that the phone service itself would be free -- advertisers would foot the bill for everything.

Video Gallery: Google and Jane Goodall?See how a Google Earth user can spin and fly into the Gombe National Park in Tanzania and access chimpanzee biographies as well as field notes from researchers at the Jane Goodall Institute. Google Earth Outreach helps organizations to raise awareness about important world issues by layering information over its maps.

Some fear that letting revenue dictate search results will turn away customers. The fear is that if you don't pay for Google to feature your business, your business will be buried under a host of other search results, even if you provide the best service. Others worry that advertising dollars will come before accuracy, meaning that you might get search results that have little or nothing to do with what you actually are looking for just because those companies paid a premium advertising fee.

Another possibility is that Google will incorporate Gadget ads in its phone software. Gadgets -- also known as Widgets -- are small icons or displays that link back to products and services, almost like a miniature Web page. You could download a Gadget that displays the local weather report, for example. Google calls Gadgets "Websites within Websites" [source: Google AdWords].

Some think that Google isn't seriously considering entering the mobile handset market at all. They say that the market has a low profit margin and that Google doesn't have a lot of experience with hardware. It's much more likely, in their view, that Google will follow one (or more) of the following three strategies:

Become a phone network administrator and service provider, joining the ranks of other companies like Sprint and Verizon. Google wouldn't build the hardware, but would provide phone service to customers.
Create an operating system to compete with Symbian, Windows Mobile, Linux and other smartphone systems. Phone coding is complex and difficult, leading some speculators to believe that Google would avoid trying to reinvent the wheel and instead concentrate on the third option.
Offer a suite of applications and programs for existing handsets. In this scenario, Google would sell suites of applications to vendors, making phones much more compatible with the Internet.

Analysts with Lehman Brothers believe Google will unveil a phone by February of 2008 [source: The Independent]. Other analysts believe that Google will announce its mobile device software platform before the end of 2007. Either way, it looks like the mystery surrounding the Google Phone will soon be solved.

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How the Google Phone Will Work