Google Enters Wireless Market with Android OS

In a bid to tap a potentially vast new resource for ad revenue, Google announced Monday that it has formed an alliance with 33 partners, including handset manufacturers, cellular carriers and other tech companies, to provide a new mobile phone platform for free. Google-enabled phones are forecast to hit the market in H2 2008. The platform, dubbed Android, offers an OS, a user interface and Web-browsing software. It will be made available to developers next week. "We're hoping thousands of different mobile phones will be powered by Android," said Google CEO Eric Schmidt. Because the software will be free, operators could pass savings on to consumers through phone subsidies or better rates. The Open Handset Alliance includes Samsung, Motorola, T-Mobile and Sprint Nextel. Conspicuous absences include Verizon Wireless, Nokia and Research in Motion. Verizon Wireless is said to be unconvinced that Android will prevent invasions of consumer privacy or security breaches. Google's software will compete with many other platforms, including those of Microsoft and Palm. Nokia points out that it preceded Google in providing open source software for phones: its high-end phones use the Symbian OS and have a "large community of application developers," according to the WSJ. "It's great to see others following the trail we've been blazing," said Nokia executive Bill Plummer. Google shares hit a record $730.23 Monday before closing up 2% at $725.65.

Sources: Wall Street Journal I, II, Reuters, New York Times, Barron's I, II
Commentary: Android Will Tighten Google's Grasp on Internet Advertising • Google Ends 'Gphone' Rumors with Open Handset Alliance • Google's Mobile OS Imminent - Media
Stocks to watch: GOOG, S, MOT, DT. Competitors: NOK, PALM, MSFT, RIMM. ETFs: WMH, BDH, FDN
Earnings call transcripts: Google Q3 2007, Sprint Nextel Q3 2007, Motorola Q3 2007, Deutsche Telekom AG Q2 2007

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