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Gphone: Google's Latest Play for Global Domination?

Gphone: Google's Latest Play for Global Domination?

Google's mysterious poking around in the wireless communications space is spawning rumors of an advertising-supported smartphone carrying the Google brand. The rumors have been given some support, however, by a Wall Street Journal article that says the search and advertising giant is courting wireless service providers for the would-be device. For its part, Google is saying very little.

By Chris Maxcer
08/02/07 2:08 PM PT

The persistent rumors surrounding a Google "Gphone" have been stoked again, this time by a Wall Street Journal article that reports that Google is courting wireless operators to provide an ad-supported mobile phone service to Google-customized handsets.

The Journal article does not directly identify sources of this information, only that it's coming from "people familiar with the plans" and "who have been briefed on it."

Coals Burning for a Long Time

The rumors flared in March after tidbits hit the Web on the news of a Google-manufactured phone, and Google has consistently said very little about its mobile phone plans. Google's more recent lobbying of the Federal Communications Commission surrounding the upcoming auction of the 700 MHz (megahertz) spectrum -- where the company wanted the auction winners to be required to resell wireless access to the spectrum to competitors (like Google) at wholesale rates -- has added fuel to the fire.

In addition, the mobile device Web search and mobile application market has been growing, and it's clear to everyone in the industry that Google is keenly interested in mobile ad services. However, it's possible that all of this is simply rumor and that Google is primarily interested in partnering with carriers and taking a back seat to device branding or terms of service.

Hardware Prototypes?

The Wall Street Journal, however, reports that Google already has hardware prototypes in hand.

Google's users and partners have been saying they want Google search and Google applications on mobile solutions, and Google is working hard to deliver on those requests, the company said in an e-mail to TechNewsWorld.

"We're partnering with carriers, manufacturers, and content providers around the world to bring Google search and Google applications to mobile users everywhere," Google noted.

What's interesting about Google's open-ended statement is the inclusion of "manufacturers", which seems to imply another level of progress -- is Google working with manufacturers to produce it's own phone? Or is Google working with manufacturers to more directly embed Google solutions on other brands of cell phones? Or both?

Tough Sells to Carriers

Still, even if Google won a portion of the 700 MHz spectrum at auction next year, it would be a long way from being able to build out an infrastructure to support its own Google phone service, and that means Google would have to partner with other carriers that already have their own service infrastructures in place. The obvious key players are AT&T, Sprint, T-Mobile and Verizon.

AT&T talks to "many, many companies on a variety of topics," AT&T spokesperson Mark Siegel told TechNewsWorld. However, he would not confirm that Google is shopping around an ad-supported mobile service model. Siegel did acknowledge that ad-supported mobile services are "an area we are looking at" but also stressed that AT&T has nothing to announce at this time.

There's only one way to get the carriers to respond -- convince them they will make more money by providing services for a Google-focused phone than they would make without it or by competing against it. Current cell phones are already indispensable to most adult consumers -- why rock the boat?

A Better Product?

Either way, for Google to succeed, it has to produce a better product or fill a growing niche. It's already proven that it can deliver solid products through newer media -- search, Gmail, Google Apps, Google Earth, not to mention its industry-dominating Google advertising programs. However, can Google leverage its brand and applications and reach a new or growing audience? That's the core question.

"We have seen many efforts at ad-supported telecom in the last 10 to 15 years, and they have all failed. It sounds like it should make sense, but it just hasn't made it," Jeff Kagan, a telecommunications industry analyst, told TechNewsWorld.

"We really don't know, if it's ad supported, what that will mean -- what customers may have to listen to or look at in order to make a call, and if that's the case, who will be interested in it," he noted.

"If it's going to be successful, I don't think it's going to be successful for people who can afford a phone. It'll be successful for teenagers, for high school or college students, for anybody who can't afford a cell phone," he added.

Better Than an iPhone?

A so-called "Gphone" -- if the rumored device even ended up carrying the Google brand at all -- would most certainly be a smartphone device. While Apple's iPhone has opened up the smartphone market to consumers, there may be room for a device that's considerably less expensive than the iPhone's steep US$499 to 599 price tag.

As for the advertisements, it's hard to imagine that consumers would put up with ads or messages that would delay the act of communicating. Google may have some new advertising models in mind.

"We don't know what the model is going to look like," Kagan said. "The good part of this is the ads could all be interactive with Google apps and features -- Gmail, Google's search engine."

Fun Wears Out

With the iPhone, system-oriented messages will sometimes pop up on the screen that require the user to make a choice or otherwise act by tapping the screen. For instance, after iPhone users watch a movie on the iPhone, the iPhone displays a message asking users if they want to delete the video to save storage space. Google could easily work similar advertisements into its offerings. After all, Google owns YouTube.

"In the beginning, all this stuff is fun," Kagan said, referring to buttons and messages that require action on mobile devices -- or otherwise disrupt a phone's core functionality. "But after a while ... it's not fun anymore."


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