Google-Led Android May Shake Up Market (Investor's Business Daily)
Brian Deagon 2 hours, 1 minute ago
By the time the first cell phone based on the Google-led Android platform hits the market this year, the product will have already been raked over like hot coals on a Texas barbecue.
Android enthusiasts have ferreted out and posted on the Web all manner of details on the phone. Based on information allegedly leaked by Android testers, and posted on Web sites such as AndroidGuys.com and AndroidCommunity.com, the phone is powered by a Qualcomm (NasdaqGS:QCOM - News) processor and has a qwerty keyboard that slides out from under the screen, a 3.1-megapixel camera, a 1-gigabyte memory card, a video player and a touch-screen.
The first Android phone will be made by Taiwan-based HTC and carried by T-Mobile, both companies acknowledge. Many analysts expect the phone to be unveiled this month and in T-Mobile stores by mid-October.
"T-Mobile is on track to bring an Android-based phone to market in the fourth quarter," said a T-Mobile spokesman. "We haven't announced any specific details about the Android phone at this point 14d don't comment on rumors."
Said an HTC spokeswoman: "HTC has acknowledged they will be delivering an Android-based device in the fourth quarter. We can't confirm exact dates right now."
Google (NasdaqGS:GOOG - News) announced Android and the creation of the Open Handset Alliance in November 2007. The alliance counts 34 members. They include Qualcomm, Intel (NasdaqGS:INTC - News), Motorola (NYSE:MOT - News), Texas Instruments (NYSE:TXN - News) and LG Electronics. Mobile carrier supporters include Deutsche Telekom's (NYSE:DT - News) T-Mobile and Sprint Nextel (NYSE:S - News), Japan's NTT DoCoMo (NYSE:DCM - News) and China Mobile (NYSE:CHL - News).
Alliance Of Supporters
Android could shake up the smart phone market led by BlackBerry maker Research In Motion (NasdaqGS:RIMM - News) and Apple's (NasdaqGS:AAPL - News) iPhone. (Google CEO Eric Schmidt is an Apple director, but the parties haven't yet addressed any questions of conflict of interest.) Android's alliance of supporters and Linux open-source software could change the way wireless carriers select and sell phone applications, many analysts say.
Neither AT&T (NYSE:T - News)nor Verizon Wireless, the two largest U.S. mobile carriers, have committed to supporting Android phones.
"The importance in the beginning is not the number of Android units sold," said Bill Whyman, a tech analyst at research firm International Strategy & Investment. Android's market share will likely remain in the low single digits for several years, he says.
"The bigger question is what impact Android will have in creating more openness in handsets," he said.
Android is free for handset makers and application developers. Its no-strings-attached nature differs from proprietary platforms such as the iPhone, the BlackBerry and Microsoft's (NasdaqGS:MSFT - News) Windows Mobile (NasdaqGS:PALM - News).
Strong developer support for Android could open up a market long controlled by the cellular carriers.
"Now, the strongest carriers like AT&T and Verizon own the customers and the revenue streams," Whyman said.
Android applications will be able to work on a broad array of devices. Its apps will work with any Android-based phone. Developers can sell and support their Android apps.
Phones based on open-source software already exist. Verizon is among 50-plus companies to support the LiMo (Linux Mobile) Foundation. LiMo was founded in January by Motorola, NEC, DoCoMo, Panasonic (NYSE:MC - News), Samsung and Vodafone (NYSE:VOD - News). The LiMo Foundation says 22 handsets run on LiMo.
Behind Nokia's Symbian Buy
Linux-based phones have scant market share, but it's a ripple that could turn into a wave, analysts say. And that's partly why Nokia (NYSE:NOK - News), the No. 1 handset maker, bought out its partners' share of Symbian, the cell phone platform it founded a decade ago. In June, Nokia paid $410 million for the 52% of Symbian owned by Sony Ericsson, Panasonic and Samsung. Nokia then handed over rights to Symbian to the newly created Symbian Foundation, which will make the operating system free to the group's members. Members include AT&T, Motorola, Samsung, Vodafone and NTT DoCoMo. They pay a $1,500 annual fee.
Which operating system will succeed best will depend largely on the support of application developers. Apple and RIM recently announced the creation of $100 million and $150 million investment funds, respectively. Developers can tap the fund to create iPhone and BlackBerry applications.
"There will be a struggle to attract a community of developers," said Shiv Bakhshi, an analyst at research firm IDC.
Analysts say T-Mobile was a logical choice to pick up Android because the No. 4 U.S. carrier lacks a marquee product. AT&T has the iPhone. Sprint has the touch-screen Samsung Instinct. Verizon has several compelling phones from LG, says Jack Gold of research firm J. Gold Associates.
"T-Mobile needs to do something to get out of the doldrums," he said.
HTC's Android will support 3G, the emerging broadband technology, but T-Mobile USA is behind its three larger rivals in rolling out 3G.
So, "once the Android phone gets to market it will have to rely on a relatively slow network to power it," Gold said.