What's Real in Renewed Talk of A 'GPhone'?

There have been so many stories since the Friday release of iPhone 3G it's dizzying: the lines, the European sales, the software update glitches, the rapturous reviews of the Apps Store and so on. Even as they curse the iPhone all Apple's competitors owe the company a debt of gratitude for helping to build awareness of the mobile Internet and giving the industry the kick in the pants (and shock) it needed.

Lines for iPhone in SF

(Lines at the Apple Store in SF on Friday)

Amid all this TechCrunch and GigaOm are speculating about the potential (re)emergence of a branded Google phone or "GPhone," based on a snippet of a quote that appeared in an article from MediaWeek/Hollywood Reporter this past week:

The trio of Google execs also used the opportunity to talk about the inroads the company is making with its own branded mobile phone as a replacement for the iPhone, as well as the Chinese market and how they're treated there -- and even Google's inhouse educational programs and the salaries and potential of teachers.

The writer was probably talking about Android and not a GPhone. But there almost certainly will be Google branded phones in the market after Android phones finally make their debut. Now what does "Google branded" mean exactly? It could mean one or both of two things. The Google software is prominent enough that the phone is primarily identified with Google (something akin to how Micorosft promotes Windows Mobile). Alternatively it could mean a specially designed handset (as TechCrunch posits) that bears the Google name. (This latter scenario is probable but more complicated for Google from a competitive standpoint.)

Google developed Android and brought together the Open Handset Alliance (OHA) so that it could help move the whole industry forward and indirectly advance its own position in mobile (see, "Will Google Dominate the Mobile Web?"). If mobile usage and search rise, so will Google is the logic here. That is a fair assumption.

Android is fundamentally about scale on a global basis, which is one of the primary values and drivers in Google's thinking about products. But the company, recognizing the success of the iPhone, has always also considered its own branded phone. It has never shut the door on this possibility. Here's a summary of Google CEO Eric Schmidt's remarks during the conference call held to announce Android and the OHA in November, 2007:

ES: Imagine not just one Gphone, but a thousand Gphones as a result of the partnerships … the many other people who will be joining the open initiative. We forgot to tell you that it’s available next week, and the terms are the broadest in the industry.

Q: ………..Gphone?

ES: We are not announcing a Google phone.

Q: Eric, I want to go back to the Gphone–what’s the deal?

ES: The deal is we don’t pre-announce products… if there were to be a Gphone, it would run Android…”

Thus I would imagine we'll see varying degrees of "GPhones," depending on the prominence of Google software and Google services. But I would also image the company will bring out a phone that has the word "Google" on the plastic casing that houses the chips and software.

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A GPhone and Carriers: Verizon and AT&T have "opened up" to allow third-party phones on their networks. This would permit a GPhone, which almost certainly wouldn't be sold by Verizon -- although potentially by competitors such as T-Mobile, which has already promised Android phones this year -- to operate on the major U.S. carrier networks.

Recall that Google bid in the US 700MHz spectrum auction to help "unlock" the U.S. carrier grip on wireless spectrum access. Google continues to work on mobile broadband access through the "White Spaces Coalition."The company is also an investor in the Sprint/Clearwire WiMax initiative. All these efforts to gain direct access to mobile broadband further point to the possibility of Google-branded hardware devices.

A branded GPhone is thus be all but guaranteed a home on U.S. carrier networks or alternative networks. In Europe a GPhone could be immediately introduced across networks.