Google makes its move on smartphones

Web company, T-Mobile take on industry stalwarts with G1

Google founders Larry Page (left) and Sergey Brin show off the G1 cellphone yesterday in New York. (Jacob Silberberg/Reuters)

NEW YORK - Google isn't just for Web browsing any more.

The giant Internet search service yesterday joined with cellular carrier T-Mobile USA to unveil the first cellphone based on Google software. It's an aggressive bid to pry open the market for advanced wireless smartphones.

Cole Brodman, chief technology officer for T-Mobile USA, noted only about 16 percent of Americans use their wireless phones to access the Internet. "We're going to change all that," he said.

But the new phone, the G1 from Taiwan's HTC Corp., contains few breakthrough features and seems unlikely to challenge the popularity of rival smartphones like Apple Inc.'s iPhone. "I don't think that this phone itself is a groundbreaking thing," said Jane Zweig, chief executive of telecom research firm the Shosteck Group in Columbia, Md.

Instead, the G1 is the first step in Google's strategy to remain relevant in a world in which billions of people go online via pocket-sized devices, as opposed to desktop computers. "There's 200 million PCs sold every year, and a billion mobile phones," said Richard Miner, Google's group manager of global platforms. Working out of Google's office in Cambridge, Mass., Miner and his colleagues helped develop the phone's operating system, called Android, which is tailored to work with Google's Internet services, including mail, word processing, spreadsheet, calendar, and mapping programs.

"To grow your services business you need a platform on which those services can run efficiently," said Shiv Bakhshi, wireless industry analyst at IDC Corp.

Earlier this month, Google introduced Chrome, a Web browser for desktop computers that was designed to work well with Google's Internet services. The same browser technology is part of Android, along with a host of features that are tightly integrated with Google online services.

And Google plans to give away the Android software. To use other popular cellphone operating systems, like Microsoft Corp.'s Windows Mobile or Research In Motion's BlackBerry software, phone makers must pay licensing fees. Google's software giveaway will create incentive for phone makers to produce Android phones; Motorola Inc., Samsung Electronics, and LG Electronics Inc. are already committed to building Android phones.

Christopher Schlaffer, group product and innovation officer at T-Mobile USA's parent company, Deutsche Telekom, said the G1 "is a milestone in bringing the open mobile Internet to the mass market." But in its present form, the phone hardly seems revolutionary. It has a touch-sensitive screen and slide-out keyboard, but those have become common.

A few features hint at unrealized potential. For instance, with a touch of someone's name in the phone book, you can call up a map of the person's address. The phone uses Google Street View to show photographic street-level images of a location. A feature called Compass View then lets you rotate the phone for a 360-degree view of the area. Unfortunately, this feature didn't always work during demonstrations.

Another touted feature was supposed to indicate whether people in the phone book were logged onto Google Talk, an instant messaging service. But repeated efforts to activate the feature were unsuccessful.

Only a handful of independent software developers had programs ready for the G1. Perhaps the most impressive was ShopSavvy, which turned the G1's camera into a bar code scanner. With a touch, ShopSavvy could identify a product, then search the Internet for vendors that sell it. It also used the phone's global positioning system to identify local retailers that sell the same item. Still, Android has a long way to go to compete with the thousands of software programs for iPhone, Windows Mobile, and BlackBerry phones.

The G1 will be available exclusively from T-Mobile USA. It goes on sale Oct. 22 for $179 with a two-year service contract. Users can select any standard T-Mobile voice plan, starting at $39.95 for 300 minutes, but must also buy a data plan to use the phone's Internet features. An unlimited data plan will cost $35 a month.

Like the iPhone, the G1 will feature Wi-Fi wireless networking. That could come in handy, because T-Mobile has been slow to install high-speed 3G data service. The company recently launched 3G service in Boston, and plans to offer it in about two dozen US cities by year's end.

T-Mobile competitor Sprint Nextel Inc. also plans to bring Android-based phones to market, and a number of European and Asian carriers have come on board. In March, Google's Miner told Information Week the potential market for Android phones would be much larger than for the Apple iPhone, because so many manufacturers and carriers might offer them.

Yesterday, Miner wasn't as aggressive. But, he predicted, "By 2010, every carrier's going to offer some Android handsets."

Hiawatha Bray can be reached at bray@globe.com.