Why Would Google Make a Phone?

Why Would Google Make a Phone? Rumors abound that Google plans to launch a mobile phone, reportedly code-named “Switch,” with the look and feel of a BlackBerry but with better Internet capabilities. But in all the commentary from news agencies, blogs, gadget sites, analysts, investors, and reportedly Google’s own operation’s chief for Spain and Portugal, there haven’t been many compelling reasons given as to why Google would enter the mobile phone market. It’s a highly cutthroat business. Just ask Taiwan’s BenQ. The company tried to revitalize Siemens’ mobile phone operations, but one year and US$1 billion later, it gave up. It’s not hard to see why Nokia and Motorola gained market share against most of their rivals last year. But even their stock prices have suffered, because fierce price competition for handsets hurt their profitability. Still, the idea of a Google phone is compelling, and great fun to read about. There are even pictures of the rumored device, including one at gadget site Gizmodo.com. The picture shows a flat-screen mobile phone, purportedly designed to work like a BlackBerry. Another, altogether different design can be found at Engadget.com, but authors on the site cast doubts about whether the photo—or the phone—is real. The Engadget picture comes from a forum member on Mobileburn.com, who goes by the online name of Madnezz and claims he filled out an online survey about a Google phone developed by Samsung Electronics. If you click that link, note that beside Madnezz’s name is a picture of his online persona, or avatar: a boy covering his mouth and laughing as if he’s done something naughty. Could that be all this really is, some rumor and speculation, thrown together with a few tall tales to stoke the flames? If nothing else it’s excellent publicity for Google, especially if the company is coming out with some new mobile phone applications soon. Rumors of a Google phone have been around at least since last December, when it supposedly planned to team up with Taiwan’s High Tech Computer to make the device. But the commentaries have been mostly about rumors, and they lack a good motive for such a move. Google makes software, not hardware, and rumors that it was developing a PC a few years back turned out to be wrong—it was simply making software for PCs. Some say Google wants to make something like Apple’s iPhone, but called the gPhone instead. The easy answer to that theory is that almost everyone wants to make something like Apple’s iPhone, so Google would be entering a crowded copycat business. That doesn’t sound like Google. Sure, Apple jumped into the phone business, but it already made hardware, and it had to defend its music player business as those functions moved onto phones. Even worse, if Google makes its own handset it will become a competitor to companies like Samsung, which are preloading Google software on their own phones. These companies have other choices for mobile search, including Yahoo and Microsoft, and Google would risk losing some valuable preloading partners. Another theory says that Google wants to make a low-cost device to increase Internet usage around the world. But it is already part of one such group, the One Laptop Per Child project. Besides, mobile phone makers are already slashing the cost of Internet-ready phones with developing markets in mind. Google has said only that mobile applications are important to the company, and declined further comment on the speculation. The head of its operations in Spain and Portugal, Isabel Aguilera, told the Spanish news site Noticias.com last week that Google has been exploring the idea of a phone and that some of its engineers have spent time working on one. It’s not exactly a smoking gun; Google is famous for encouraging its engineers to spend a portion of their time on experimental projects, many of which never see the light of day. The company also posted a job advertisement recently, saying it was “experimenting with a few wireless communications systems.” But in the end, the evidence for a Google phone is thin at best. Indeed, The Wall Street Journal reported Saturday that all the phone talk is misguided, and that Google is really developing new software for mobile phones, albeit more sophisticated than what it has developed before. And that sounds a lot more like Google.