Google's gPhone: Is There Really Room For One More Device?

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CNBC.com

It's maybe the wireless world's worst kept secret: the upcoming gPhone from Google, handset maker HTC and T-Mobile, which I'm told will be formally unveiled in New York City next Tuesday.

The deeper question is will anyone care, and will this necessarily be the panacea Google'sbeen looking for as the lines between the desktop and the handset get blurrier and blurrier every day. The hype surrounding Google's mobile operating system, Android, has been deafening.

However, at a time when Research in Motion's BlackBerry is surging, Apple'siPhone owns the "slick" segment, Palm's Centro is selling well, and Microsoft'sWindows Mobile devices are enjoying widespread success, you just have to wonder whether there's room for one more.

Google will hardly be a me-too vendor. I'm sure the new HTC "Dream" phone will be feature-rich. But how it looks and how it feels might eclipse what it does since there are so many other options out there for consumers right now. The market won't stand for another big, bulky phone that does the same things all those other phones can do. So the pressure's on for HTC to deliver something aesthetically unique, and technologically superior considering the big bucks Google has invested in getting this OS out the door.

That's a high bar. This will test Google's innovation ability in a big way. Its new browser Chrome has been met with mixed reviews. Google's initiatives in wireless, however, are arguably far more important. The company has no real experience in operating systems, let alone creating hardware based on them. Its bread and butter has been Search. At least when Apple jumped into the wireless market with iPhone, the device was borne out of the company's expertise in BOTH hardware AND software. I'm not sure Google brings that kind of expertise to this party.

In many respects, Google has no choice. The wireless sector, as I have said before, is easily the most dynamic thing in tech right now, and likely for years to come. Google needs to stake its claim in wireless Search.

It's a natural evolution for the company, and follows Google's ongoing strategy of offering agnostic software that'll run on any device. That's what makes Android, and Google's partnership with T-Mobile so quirky. Why risk alienating other handset makers and carriers by offering an OS of your own when your search software already runs just fine on Windows Mobile, BlackBerry and iPhone?

The better question is why not? All of these software players are gunning for control of the mobile experience. And not just Search. Mobile advertising today is virtually an untapped market, not just by Google, but the carriers as well. Some estimates suggest mobile advertising only represents about 5 percent of mobile phone revenue today. If Android and T-Mobile show there's more than mere potential here, but an actual and robust revenue stream, AT&Tand Verizon might beat a path to Google's door. Might.

The T-Mobile "Dream" running Google's Android OS will be an intriguing product. And so aptly named. All these players are dreaming of the next generation of big-time money in wireless.

The reality, however, is still a ways away, which is important for investors looking at next week's announcement as some kind of major catalyst. My read: You still have time for a nap.

    • Mobile search about to become real business: MCN

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