John Markoff of NY Times interviewed me for this article that appears in today’s paper.

http://www.nytimes.com/2007/11/06/technology/06google.html

Google Enters the Wireless World

By MIGUEL HELFT and JOHN MARKOFF

SAN FRANCISCO, Nov. 5 — What Apple began with its iPhone, Google is hoping to accelerate, with an ambitious plan to transform the software at the heart of cellphones.

The personal computer is climbing off its desktop perch and hopping into the pockets of millions of people. The resulting merger of computing and communications is likely to revolutionize the telecommunications industry as thoroughly as the PC changed the computing world in the early 1980s.

Google, which wants to be as central to the coming wireless Web as it is to today’s PC-dominated Internet, announced on Monday that it was leading a broad industry effort to develop new software technologies aimed at turning cellphones into powerful mobile computers.

If successful, the effort will usher in new mobile devices that as the iPhone has done, will make it easier to use the Internet on the go. The phones, which would run on software that Google would give away to phone makers, could be cheaper and easier to customize.

And by giving outside software developers full access to a Google-powered phone’s functions, the alliance members hope for a proliferation of new PC-style programs and services, like social networking and video sharing.

“We’re human beings and we communicate, and that’s what the Internet social network phenomenon is all about,” said Robert Pepper, a former policy chief at the Federal Communications Commission. “The Internet is going mobile, and it’s not just top down, its one-to-one and many-to-many all at the same time, and that’s what the Google guys get.”

With the move, Google is trying to alter the dynamics of yet another industry. It is already using its deep pockets and innovative technology to shake up television, book publishing, computer software and advertising.

But while Google’s much-anticipated plan has encouraged talk of a Google Phone, the company said that for now it had no plans to build phones. Instead, it has signed up powerful partners to develop and market the phones, including handset makers like Motorola and Samsung, carriers like T-Mobile, Sprint and China Mobile and semiconductor companies like Qualcomm and Intel.

The group, the Open Handset Alliance, expects to start selling the Google-powered phones in the second half of next year.

Analysts were quick to point out that impressive telecommunications and computing alliances had been proposed many times in recent decades and had often had little impact. And the alliance’s software, which is not yet complete, would face competition from established rivals, like Microsoft, Nokia, Palm and Research in Motion.

“I’m not convinced,” said Chetan Sharma, a technology consultant who tracks the wireless data industry. “It’s a pretty impressive list of people in the group, but it takes a long time to get things into the ecosystem.”

However, the strength of Google’s brand with consumers, as well as the open-source strategy that will make the phone software freely available and customizable, make it difficult to discount Google’s potential impact.

For Google, the initiative is an ambitious push to take its overwhelming dominance of advertising on PC screens onto wireless devices. The company has been frustrated at the limited availability of its services on mobile phones, whose features and software are largely controlled by carriers and handset makers.

By courting programmers, Google hopes to give the phones abilities that users demand and carriers find difficult to resist.

The idea is that just as spreadsheets, word processors, video games and other software tools turned the personal computer into an everyday appliance, the emergence of new mobile applications can spur wider adoption of so-called smartphones. More use of the Web, whether on PCs or on phones, benefits Google because its advertising systems have such broad reach.

Software developers “will build applications that do amazing things on the Internet and on mobile phones as well,” Eric E. Schmidt, Google’s chief executive, said at a news conference.

Google’s stock hit a record of $730.23 on Monday before closing at $725.65, up 2 percent.

The 34-member Open Handset Alliance also includes mobile phone operators like NTT DoCoMo and KDDI of Japan and Telecom Italia of Italy, the phone makers HTC and LG and chip makers like Broadcom and Texas Instruments. EBay, which owns the Internet calling service Skype, and Nuance Communications, which makes voice recognition software, are also members.

The list of powerful partners illustrates the substantial inroads that Google has made in the highly competitive industry, as well the challenges it still faces. For example, the two largest cellular carriers in the United States, AT&T and Verizon Wireless, which together account for 52 percent of the market, are not part of the alliance.

While a Verizon spokesman said the company had not ruled out the possibility of joining, an AT&T spokesman, Mark Siegel, said AT&T had no plans to participate.

“Google’s announcement is about what is going to happen in the future, and our focus is about delivering the goods today,” Mr. Siegel said.

Apple executives declined to comment on the Google announcement. However, an Apple spokesman noted that its chairman, Steven P. Jobs, said recently that the company planned to allow programmers to write applications for the iPhone, beginning in February.

Alliance members said they had high hopes for the project.

“Just like the iPhone energized the industry, this is a different way to energize the industry,” said Sanjay K. Jha, chief operating officer of Qualcomm, which makes chips used in wireless phones. Mr. Jha said the Google technology would bring better Internet capabilities to moderately priced phones. He also said innovation could accelerate, as developers would be able to enhance the software, which is based on the Linux operating system, as they saw fit.

The phone plan mirrors Google’s efforts to give away software and services for PCs and profit through customized advertising. As such, it is a potential competitive threat to Microsoft and other mobile software designers.

Mr. Schmidt of Google has said in the past that advertising on mobile phones is likely to eventually bring the cost of making calls to zero. But alliance members said Monday that they did not expect the industry’s business model to change quickly.

John O’Rourke, general manager of Microsoft’s Windows Mobile business, said he was skeptical about the ease with which Google would be able to become a major force in the smartphone market. He pointed out that it had taken Microsoft more than half a decade to get to its current level, doing business with 160 mobile operators in 55 countries.

“They may be delivering one component that is free,” Mr. O’Rourke said. “You have to ask the question, What additional costs come with commercializing that? I can tell you that there are a bunch of phones based on Linux today, and I don’t think anyone would tell you it’s free.”

Handset makers are expected to sell about 12 million Windows Mobile phones this year, accounting for about 10 percent of the global smartphone market, according to the research firm IDC.

Apple, which began selling its iPhone last summer, will account for 1.8 percent of the market. Symbian, which is backed by the phone maker Nokia, dominates the market with a 65 percent share, IDC says.

Google said software makes up about 10 percent of the cost of current phones, although that percentage is rising as phone hardware becomes cheaper.

A brief demonstration of the Google software suggests that phones made using the technology will have features and design similar to the iPhone. Andy Rubin, Google’s director of mobile platforms who led the effort to develop the software, recently demonstrated a hand-held touch-screen device that gave an immersed view of Google Earth, the company’s three-dimensional mapping program.

Mr. Rubin said the software was based on Linux and on Sun Microsystems’ Java language. It was designed so programmers could easily build applications that connect to Web services.

As an example, Mr. Rubin said the Street View feature of Google Maps could easily be coupled with another service showing the current location of friends.

Mr. Rubin also said that a program like Gmail could attach a photo to an e-mail message, regardless of whether the photo was stored in the phone’s memory or on a Web site.

Next Monday, the alliance plans to make tools available to outside programmers in the form of a software developers’ kit. The phone software is named Android, after a company that Mr. Rubin founded and that Google acquired in 2005.

Part of Google’s strategy appears to be that the Android software will lead to new kinds of devices that have cellphone and wireless Internet functions, but have shapes and sizes different from today’s cellphones and PCs.

Intel, an alliance member, has been promoting a new category of device it refers to as Mid that is halfway between a cellphone and a laptop in size. Mr. Schmidt hinted broadly at this when he answered a question on Monday about whether he had a conflict of interest as a board member of Apple, a recent entrant to the cellphone business.

“It’s important to realize there will be many mobile experiences,” he said.