Will Google Launch a Cell Phone?

Rumors Suggest That the Search Engine Giant Will Launch Its Own Device, but Google Is Keeping Quiet -- at Least for Now

By DAN ARNALL
ABC News Business Unit

March 19, 2007 — - Just months before Apple is scheduled to launch its much anticipated iPhone to U.S. customers, search-giant Google is generating lots of calls about its possible entry into the cell phone business.

Google has already launched a number of applications for mobile devices, offering both search capabilities and mapping services for cell phones. But the company has not dipped its toe in the increasingly competitive mobile device market -- at least not officially.

"Mobile is an important area for Google and we remain focused on creating applications and establishing and growing partnerships with industry leaders to develop innovative services for users worldwide," a Google spokesperson told ABC News in an e-mail statement. "However, we have nothing further to announce."

Chatter about the device has been swirling for months, but hit a fever pitch after Simeon Simeonov, a Silicon Valley venture capitalist with Polaris Venture Partners, revealed details about the device on his blog on March 4. The blog post has since been removed.

In it, Simeonov said that Google has a team of about 100 people working on the device, made up of mobile device experts from companies that it has acquired during the past few years.

He also suggested that an announced partnership with Korean electronics giant Samsung might offer clues as to who would manufacture the phone.

The Times of London reported last weekend that a Google executive in Spain had confirmed that the company is actively working on cell phone hardware.

The report says that the Google phone will not be marketed to the high-end customers that the $500 Apple iPhone is targeting. Instead, Google's device will be designed to attract customers in the fastest growing segment of the mobile market -- the developing world.

"The PC-based model is saturated in North America but in many parts of the world, the consumers' Internet experience is through a mobile device," said Kaan Yigit, president of Solutions Research Group, a Toronto-based technology consulting firm. "By making it easy to 'google' on a mobile device, they expand their market significantly."

Google, continued Yigit, is a very strong consumer brand with an accessible, likeable utility image. "If branded or co-branded with Google, the consumer will immediately think that the phone would be better optimized for a superior Internet experience," he said. "And if the unit can deliver on this, the reaction will be very positive."

All the talk has raised the rumors to a bit of a froth in the blogosphere and investors seem to be buying into the possibility of a Google entry into the increasingly competitive business. Shares of the company were trading higher during the morning hours.