An open operating system is thought to foster development of applications for mobile handsets, and encourage mobile Web adoption.
After months of G-Phone speculation, Google disclosed plans on Monday for a mobile device operating system, built on an open platform, in conjunction with the formation of the Open Handset Alliance, made up of wireless carriers and other businesses.
Rather than develop a Google-branded phone, the search company and alliance members are developing an operating system open to other stakeholders in the mobile ecosystem.
Mobile advertising is still nascent, but it's becoming a line item in advertiser budgets. And this latest development from Google, much like Apple's iPhone, is only expected to build interest in the medium. At this time, there are no mobile advertising or service companies participating in the alliance), though they are free to join.
The platform, called Android, is about creating "a whole new mobile experience for users with applications and abilities we can not do today," said Eric Schmidt, chairman and CEO of Google. It contains a robust browser, where Google feels current browsing capabilities hold users back from performing the same activities as they do on the Internet.
Handsets that run on the open-source operating system are expected to become available in the second half of 2008.
Google doesn't plan to monetize the system initially. "You won't see ad-driven content on this platform for some time," said Andy Rubin, Google's director of mobile platforms. Companies, however, can create advertising-based solutions for Android-enabled phones.
"It will unleash innovation," said Jeff Hermann, VP of Nielsen Mobile. "From an advertising standpoint, this is where the rubber meets the road. It's almost to the point where everyone's been standing behind Google, and now that they've opened the gates, everyone will come flooding through."
Hermann believes owners of an Android-based handset will be more receptive to advertising. "Those that actually buy the 'g-phone' will have an implicit understanding that this will be an advertising platform at some point, that's what Google is most known for," he said. Nielsen isn't an alliance member, though it seeks to track mobile usage.
Nielsen Mobile studies have shown mobile users are more receptive to relevant ads. Hermann adds that advertising has the potential of being more targeted with the Android platform, including reaching consumers at a specific location or time.
Mobile content, supported by ads, is expected to increase on the Android platform, say other businesses that stand to benefit from Google's mobile plans.
"This move will dramatically increase the number of advertising models that will flood the market. We have little idea what new ad-supported ideas will come of this. We do, however, know that the future of ad-supported mobile content will look nothing like the past," said Roger Wood, general manager of the Americas region for Amobee a mobile company that creates ad-supported solutions for publishers.
"If it's really open, then it's going to be a game-changing event," said Dan Olschwang, CEO of JumpTap, white label mobile search provider.
While an open source platform could result in the creation of fragmented offerings, its promises involves a platform that can serve more than one carrier and multiple handsets. "Part of the problem is working with hundreds and thousands of handsets, and that's a major resource drain and constraint of innovation," said Olschwang.
Google, along with the Open Handset Alliance, will release an early-access software development kit (SDK) to the developer community next week.
Members of the Open Handset Alliance represent five categories: mobile operators, handset manufacturers, software companies, semiconductor companies, and commercialization (define) companies focused on building user interfaces. Alliance members include Sprint, T-Mobile, Motorola, Qualcomm, eBay, and China Mobile. While many wireless carriers have maintained the walled garden approach to carrier decks, Google expects carriers to embrace the system. Seven of the 34 alliance members are carriers, including two serving the U.S. market.
The platform is open source under the Apache License Version 2.0. Sergey Brin, Google's co-founder and president of technology, reminisced about his days in grad school when he and his fellow classmates used open source tools to create school projects. "All those pieces and many more allowed us to do great things and distribute for to the whole world," he said. "That's what we're doing today, creating an open system to distribute freely" for mobile devices.
The new operating system, Android, takes the name of the mobile company Google acquired in 2005.
Many still wonder about whether Google will someday announce a G-Phone. "This is not an announcement for the G-Phone, we are hoping that this will power thousands of phones," Schmidt said.
Google has even higher expectations for the platform, hoping it will spur development of "new applications that have never been possible on any mobile device," Schmidt said.
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