Google to enter mobile phone market with software

NEW YORK/SAN FRANCISCO, Nov 5 (Reuters) Google Inc on Monday spelled out long-rumored plans to enter the mobile phone market in 2008 by building software that could help the industry make the Internet run more easily on phones.

German mobile network powerhouse T-Mobile, Deutsche Telekom's mobile unit, plans next year to start selling Google-software-based phones, while China Mobile Ltd , the world's largest mobile carrier, and top carriers in Japan said they would offer Google-based handsets.

Google, which has no immediate plans to make phones of its own, said it was working with 30 companies, including phone makers Motorola Inc Samsung Electronics Co Ltd and High Tech Computer Corp.

Also taking part are major communications chip makers, including Qualcomm Inc, Texas Instruments Inc and Marvell Technology Group Ltd.

The leading Internet company has long been rumored to be working on a new class of free or low-cost advertising-supported mobile phone of its own, popularly known as the ''Gphone.'' Google's Schmidt would not rule out the company developing its own devices but said it had no imminent plans to do so.

The Web search company is looking to expand the range of Internet services it now offers through computer browsers to the far larger mobile phone market, where a range of conflicting handset designs and software standards have hobbled Internet use.

The move will put Google in competition with major mobile device operating systems backed by Nokia and Microsoft Corp. A number of Google's partners said they would continue to work with those rival systems.

Google said it aimed to deliver software kits to handset makers in a week and sees phones based on its platform becoming available in the second half of 2008.

''It will open the mobile phone to do things that people now do on their PCs,'' said Todd Greenwald, a financial analyst with Nollenberger Capital Partners in San Francisco.

''This approach is going to be far less costly,'' Greenwald said, contrasting Google's open partnership to proprietary phone industry strategies. ''It should position Google to be an early leader in the mobile advertising market.'' The Mountain View, California-based company has set up an industry consortium including 30 partners so far that it calls the Open Handset Alliance (http://www.openhandsetalliance.com/).

It said the software system, known as Android, will be ''the first truly open and comprehensive platform for mobile devices.'' Android was the name of a small start-up Google acquired in 2005 that was founded by Andy Rubin, a veteran Silicon Valley gadget designer. Rubin earlier this decade created the innovative ''Sidekick'' mobile Internet device while at start-up Danger Inc.

Sprint Nextel Corp, the No. 3 U.S. mobile service and a member of the alliance, said the system will be based on open-source Linux code and available to phone makers and carriers without license fees.

It is expected to support applications from different developers as well as Google Web search, e-mail and mapping, according to Sprint.

Sprint said it has not committed to putting the software on its phones but is in negotiations with Google about financial terms with a view to offering the system to its customers eventually. Sprint did not give a time frame.

John Garcia, Sprint senior vice president for product management, said an agreement between Google and Sprint could cover everything from delivering mobile ads to putting Google's brand on phones designed especially to support its operating system.

''Rather than trying to restrict customers and saying you can only use my services, which we think has limited growth potential, we'd rather give customers exactly what they want and benefit that way,'' said Garcia.

Google shares were up 1.9 percent, or .32, to 4.57 on Nasdaq after reaching a new intraday high of 0.23 earlier.

The stock traded around 0 in mid-August before speculation about the impact of Google's push into mobile phones -- as well as new forms of online advertising, such as video -- propelled shares to current record levels.

REUTERS MP AS0158