On Monday, Google, a new software platform designed to provide open access to mobile phones for application developers. The company also announced the Open Handset Alliance, a multinational alliance of 34 companies, including several chipmakers, handset manufacturers, and mobile operators that will be working together to develop handsets and services that leverage the new software.
A software development kit will be introduced next week, and consumers can expect to see the first Android handsets out on the market in the second half of 2008, Google CEO Eric Schmidt said during a press conference Monday.
Rumors had been. And now that it's here, it's clear that Google has greater ambitions than simply building a new phone. Instead, the company is looking to transform the mobile industry by making it easy to develop new applications that can be pushed out to hundreds of handset models on dozens of carrier networks using free, open-source technology.
In essence, Google hopes to do to the mobile market what it has helped do for the traditional Internet, which is bring people closer to content on the Web in a easy and organized way. At the most basic level this means making Web surfing on a cell phone look and feel a lot like it does on a PC at home.
But despite its lofty ambitions, Android faces many obstacles. For one, mobile operators must be willing to allow the new, open devices on their networks. Android also must compete with a long list of mobile operating systems already entrenched in the market.
analyst with Forrester Research
"While I believe the effort by the Open Handset Alliance will have a significant impact on the market, I think it will build slowly over time," said Charles Golvin, an analyst with Forrester Research. "Even if there is a tidal wave of new devices using the Android platform, they will still represent a relatively small portion of the overall market."
Unlike the PC market of the late 1990s, the mobile market is fragmented and closed off. For the most part, mobile operators control what applications and features operate on the handsets that use their networks. This is completely different from the traditional Internet, where it doesn't matter if you access the Net from a Dell or Hewlett-Packard PC, you'll have a similar surfing experience.
Google is trying to overcome this hurdle by getting carriers around the globe involved in the Open Handset Alliance. So far, KDDI and NTT Docomo, two of the largest carriers in Japan, are on board.
European carriers Telecom Italia, Telefonica, and T-Mobile are also signed up to be among the first carriers to offer Android phones. In the U.S., which is probably one of the most restrictive of all mobile markets, Google has managed to sign up two of the top four wireless operators, Sprint Nextel and T-Mobile USA.
Notably missing from the alliance are AT&T and Verizon Wireless--the largest operators in the U.S.--which together account for about 52 percent of all cell phone subscribers in the country.
Surprisingly, Verizon Wireless, known for being the most guarded of the major U.S. operators, has .
"We haven't ruled out joining this group," said Jeffrey Nelson, a spokesman for the company. "We support innovation that is consistent with the values of integrity of service, privacy, security and reliability. And we welcome the support of Google, handset makers and others for our goal of providing more open development of applications on mobile handsets."
By contrast, AT&T, which is often viewed as having a much more open strategy when it comes to what it allows on its network, kept the announcement at arm's length.
"Our focus is on delivering goods today," said Mark Siegel, a spokesman for AT&T, the largest mobile operator in the country. "I can't comment on what we might or might not do in the future. We offer people an incredible array of choices right now, and that's what our focus is at the moment."Part of AT&T's hesitation to commit itself to the Google Alliance at this early stage could stem from its relationship with Apple. AT&T is the exclusive U.S. operator selling and supporting the iPhone. While it's unclear right now how the design and functionality of Android-powered phones will stack up with the iPhone, it's clear that Google's Android software will at the very least offer consumers more choices for surfing the Web on their mobile handsets.
Google executives say they plan to welcome additional companies to the alliance.
"Our goal has been on organizing partners at all parts of the ecosystem," said Rich Miner, who heads up Google's wireless strategy. "We'd be happy to talk to anyone who meets that criterion. I suspect you'll see a lot of handsets based on this platform, and I'm sure they (the carriers) would be attracted by those handsets."
Another major challenge for Google is that it's entering a market already claimed by other companies. Symbian has been doing this kind of work for years and enjoys about 74 percent of the smartphone market, according to Gartner. Symbian's operating system is used on Nokia and Sony Ericsson phones. But the company is not very well known in the U.S., which has lagged the rest of the world in smartphone adoption.
"We think this is a good announcement for the smartphone industry; it shines the spotlight on it in the U.S. in a positive way," said Paul Jarratt, marketing communications manager for Symbian in the United States. "One thing that we'll have to wait and see is what these phones look like; it's not trivial to put a mobile operating system together."
Microsoft has also been a player in this market with Windows Mobile, which currently ranks third in terms of smartphone operating systems behind Symbian and the collective implementations of Linux, according to Gartner. Palm is yet another competitor. The company may have fallen on hard times of late, but its Palm OS Treos are still popular, especially among business users.
Apple has of course made quite a splash this year with the iPhone by pitching a concept similar to Android: a no-compromises computing experience on a mobile phone. Then there is Research in Motion with its line of Blackberry phones, which are often compared to a highly addictive street drug.
The key difference between Google and these other companies is that Google will license Android to anyone who wants it under a very permissive license, allowing phone makers and wireless carriers to modify the software to suit their needs. Microsoft and Symbian license their technology as well, but the terms aren't as open as they will be under the Apache software license, which Google's Schmidt called "one of the most liberal licenses in the world."
It's the openness of this license that could help drive adoption of Google's Android platform.
Today, mobile application developers not only have to write code for several different operating systems, but they must also consider different user interfaces depending on the phone manufacturer and the carrier. The great promise of Android is that it simplifies this for developers. And because the software is open and distributed for free, it should also help reduce costs for cell phone manufacturers that today pay for licenses to use Symbian and Microsoft.
If Google can succeed in making Android compelling to both cell phone users and application developers, the company could be one of three main cell phone platforms on the market.
"The long-term potential impact is to drive the same kind of innovation that we see on the Internet into the mobile environment," said Forrester's Golvin. "But it's a convoluted environment and it will take a long time. In the end, there will likely be three mobile platforms that survive: Symbian, Windows Mobile, and Android."
CNET News.com's Elinor Mills contributed to this report.