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Whither the Android, Google?

June 23, 2008 |  5:02 pm
Seabiscuit versus War Admiral in 1938

Just before Apple announced its new iPhone 3G this month, Charlie Wolf, vice president of Needham & Co., said there was one thing threatening the iPhone's growth potential: Google's Android, the operating system for mobile phones that the Internet giant is creating.

Why? The Android, announced in November with more than 30 partners, has the potential to become to mobile phones what Google is to the Internet. "The obvious model Google wants to deploy is one where ads are placed on mobile phones and generate revenue," Wolf said. 

If Apple was worried, it may be a little less so now. Google's effort to make an operating system work for a variety of carriers and handset manufacturers is as hard as you might expect and facing delays, according to a Wall Street Journal story today. Naming Sprint Nextel and, gulp, China Mobile with its 400 million subscribers, the story said some partners were struggling to ship a phone with Android by the second half of the year, as Google had said.

In a statement, Google said it was on schedule to deliver an Android phone by the second half of the year. "We're very excited to see the momentum continuing to build behind the Android platform," the company said.

Does it matter how fast an Android phone appears? After all, Google has shown that ...

... it can be late to the party (Web search, comes to mind) and still completely dominate with a superior offering. If not, it has a big wallet to jump into markets it missed (see YouTube). And Apple itself has shown with the iPhone that the cellphone market is crackable despite entrenched players. Apple says it's on track to reach its goal of selling 10 million iPhones by the end of this year.

Google is doing something hard in trying to build an operating system across a variety of hardware platforms, said Ross Rubin, director of industry analysis with the NPD Group. "It wouldn't be surprising if there were delays," he said. "They are trying to launch a pretty heavy rocket into space."

Maybe it's not the right year to come out with a new phone anyway. The U.S. consumer cellphone market has seen a 20% drop in sales in the last year. One bright spot is the smart phone, the category the Android phone is going after. In the U.S., smart phones accounted for 17% of all handsets sold in the first quarter of 2008, up from 7% the year before, according to NPD's Mobile Phone Track. 

Dan Frommer at Silicon Alley Insider agrees that an Android delay, if true, is no big deal. Besides, he says, the big goal for Google isn't the Android phone but the advent of mobile websites and selling the ads that appear on those sites (all of which are agnostic to the phone they're being viewed on). Ka-ching.

-- Michelle Quinn

Photo by Associated Press

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