December 15, 2009

Google confirms secret phone

With Google's disclosure over the weekend that it would launch its own cellphone, the online giant is staking claim to a piece of the fast-growing mobile marketplace and making a direct challenge toApple's swift rise in the sector.

Google said in a corporate blog on Saturday that it has developed a phone based on its Android mobile operating system and distributed it to employees to try out. Soon after, pictures of the phone surfaced on the Twitter feeds of employees and outside bloggers with details that the device would be launched next month and sold directly to consumers. The new phone would be capable of operating on any network, according to a source close to the company who was not authorized to comment publicly.

Google's approach would run counter to the current practices of handset makers and carriers that partner up in exclusive deals to market and sell phones, and provide mobile service. AT&T, for instance, has been the sole provider of service for Apple's iPhone since the device was launched in 2007. Sprint tied up with Palm for its Pre smart phone earlier this year, and Verizon exclusively runs several versions of Research in Motion's BlackBerry.

In iPhone's case, the exclusivity agreement goes far beyond the choice of service provider. Apple tightly controls the applications that are available for the phone through its iTunes store, and its decision to block a voice application from Google sparked an inquiry by the Federal Communications Commission.

How Google's phone would connect to wireless networks was not clear Monday, and the company declined to comment on its plans beyond its Saturday blog posting. Apple also declined to comment.

But Google's latest plans appear to be aimed at countering that "closed loop" business model with a product that can run any application on any network -- a tactic that reminds experts of the battles between Microsoft and Apple over computer operating systems in the 1980s.

"This is a replica of the open-versus-closed war of the IBM mainframe versus the Macintosh for the mobile space," said Tim Wu, a professor of law at Columbia University. "And Google is settling in for a long war here."