Google Marches Android Onstage for Show and Tell

Google (Nasdaq: GOOG) reportedly took a moment to show off a prototype mobile phone based on its Android operating system at the Google I/O conference in San Francisco Wednesday.

Android is Google's open source, Linux-based mobile phone OS, middleware stack and software development platform. Android has the backing of the Open Handset Alliance, a consortium of hardware, software and telecom companies.

If the Open Handset Alliance is the car, Google is essentially the driver. And speaking of driving metaphors, one of the highlights of the demonstration was a motion- and compass-sensitive application that interfaced with Google Street View. When the prototype phone was pointed in a new direction, the street view on the phone shifted as well.

Google, for its part, declined to identify the prototype phone, though the company did say the first Android-based phones are slated to start appearing in the second half of this year.

Touchscreen, Too

The prototype utilized a touchscreen for most of its applications, but Android is flexible enough to work with other input devices like trackballs. The demo also included a desktop-like launcher for applications where users can place their own alias icons for fast app launching. Android also has the ability to learn a special touchscreen gesture from a user to unlock the phone or put it to sleep. Google also demoed a Pacman game, as well as more common applications like Google Maps.

Developers can work with the Java-based Android software developer kit now to create applications that could run on Android-based phones once they start appearing. Handset manufacturers and Open Handset Alliance members HTC, LG, Motorola (NYSE: MOT) and Samsung are expected to build Android-capable phones.

Next-Generation Advertising

Google's primary interest is spurring the development of mobile applications that use the Web and Web browsers lies in the company's vision of huge growth in mobile Web access around the world.

What's the big deal there? More advertising eyeballs for Google to sell its services against.

Android comes with some big challenges, the first of which is getting a lot of products on the shelf, Ken Dulaney, a mobile and wireless analyst and vice president for Gartner (NYSE: IT) , told LinuxInsider. If consumers can't see an Android-based phone, they're not going to buy it.

At the same time, with all of the players involved in the Open Handset Alliance effort, the group will have to do a good job managing the issue of fragmentation, especially since different players will want to deviate to provide differentiation for their products. "Open source always has this problem," Dulaney added.

Of course, getting compelling applications delivered will be important, as well as figuring out how to monetize everything. Google and the Open Handset Alliance has been criticized for not clearly fostering a way for developers to sell their applications and have them certified in some way to help spur customer acceptance.

For example, Apple (Nasdaq: AAPL) , with its iPhone, plans to launch a special application store just for iPhone and iPod touch applications in an attempt to not only control the iPhone experience and filter the revenue , but also to foster the entire iPhone development ecosystem.

Android may or may not end up needing a similar solution.