I've said it for months: There is no Googlephone. At last, the "industry analysts" so often consulted by reporters at newspapers have come around to sharing my point of view, according to a story in the New York Times. Google is, indeed, working on cell-phone software, including an operating system. But all this software, I believe, is a sideshow. Before you get all excited about the prospects of a Google phone OS, remember: Google is all about advertising. Always has been, always will be.
So why is Google wasting programmers' time working on an operating system? Microsoft, its archenemy, offers wireless carriers a bundle of its Windows Mobile operating system and applications, chiefly email and calendar software, designed to run on top of it. Microsoft's search, too, is baked in. To compete with that, Google needs to offer a similar bundle. There's nothing about Google's wireless offerings that require an operating system; on PCs, Google does quite well running in a Web browser on top of any OS. The operating system, then, is just a competitive tool to shut out Microsoft.
Gadget enthusiasts, naturally, remain fixated on feeds and speeds. What will Google's new operating system be based on? (Linux, the Times says.) What applications will it run? (The usual sort.) These are not the questions to ask. The key question is whether Google will be able to saturate cell phones with enough advertising to subsdize the cost of handsets and monthly service fees.
Let's stop talking about the Googlephone, or the GPhone, for a moment, and consider this: Apple, in an accounting move, currently spreads the revenue for an iPhone over 24 months from the time you buy it. The cost of the handset, then, works out to just under $17 a month. Could Google conceivably sell $17 of advertising a month per user? Google, with 495 million users worldwide, is expected to rake in $14 billion in advertising, which works out to about $2.40 per user per month. So clearly, it's a long way off. Then again, wireless ads, in theory, would be much more personalized and targeted, and could thereby command higher prices.
The bottom line: If you love the iPhone right now at $399, imagine how much more you'd love it if it were free. That's the true promise of a Google phone.