Google Forays Into Cellphone Market

Confirming its long-rumored foray into the mobile market, Google said today that it is developing a free cellphone software package so the Internet search leader can more easily peddle ads and services to people who aren't in front of a PC.

While the announcement ended months of speculation about the Mountain View-based company's cellular ambitions, the first phones equipped with Google's so-called 'software stack' still won't be available until the second half of 2008.

Diversifying into cell phone software could open more digital doors for Google to build upon the trove of information that it has collected about its users' personal interests so it can profit by showing more appealing ads.

Google won't be making the phones, however. Nor does it plan to stamp its prized brand on the devices. Instead, it will work with four cell phone manufacturers who have agreed to use Google's programs in their handsets. Consumers will have to buy a new phone because the bundle isn't made for existing handsets.

Engineers have been working on the software for three years, dating back to a Silicon Valley startup called Android Inc. that Google acquired in 2005. The mobile software still bears the Android name in acknowledgment of its heritage.

"This is going to bring the Internet into cell phones in a very cool way," said Andy Rubin, an Android co-founder who is now Google's director of mobile platforms.

Even with its market debut months away, Google's software looms as a significant threat to other mobile operating systems made by Microsoft Corp., Research In Motion Ltd., Palm Inc. and Symbian, which is owned by Nokia Corp. and several other major phone makers.

Because Google's software will be free, it could undercut rivals who charge handset makers to install their operating systems. It also promises to make smart phones less expensive since manufacturers won't have to pay for software.

Google's system will also be based on computer code that can be openly distributed among programmers. That, Google hopes, will encourage developers to create new applications and other software improvements that could spawn new uses for smart phones. A development tool kit for working on the new platform will be released next week.

"This is a shot that is going to be heard around the world, but it's just the first shot in what is going to be a very protracted battle in the next frontier of the mobile Web," said Michael Gartenberg, a Jupiter Research vice president.

So far, Motorola Inc., Samsung Electronics Co., HTC and LG Electronics Inc. have agreed to use Google's software in some of their phones. Both Motorola and Samsung already buy Microsoft's Windows Mobile in some of their phones.

Some key details, like pricing and how many phones will be shipped next year, have yet to be worked out. But it's quite likely that the Google-equipped smart phones will cost less than the popular iPhone that Apple Inc. began selling in June.