What Google is trying to achieve with the GPhone

Since 2005 a big group of Google engineers have been working on a cell phone project, that what IHT claims today. The site writes a formal announcement from Google will follow later this year while the first products with Google's technology may be available in 2008.

One of the main goals of Google's cell phone project seems to be to cash in more advertising dollars:

Google wants to extend its dominance of online advertising to the mobile Internet, a small market today but one that is expected to grow rapidly. It hopes to persuade wireless carriers and mobile phone makers to offer phones based on its software, according to people briefed on the project. The cost of those phones may be partly subsidized by advertising that appears on their screens.

At the core of Google's phone efforts is an operating system for mobile phones that will be based on Linux, the open-source software, according to industry executives familiar with the project.

While Google has built phone prototypes to test its software and show off its technology to manufacturers, the company is not likely to make phones, according to analysts.

In short, Google is not creating a gadget to rival the iPhone, but rather creating software that will be an alternative to Windows Mobile from Microsoft and other operating systems, which are built into phones sold by many manufacturers. And unlike Microsoft, Google is not expected to charge phone makers a licensing fee for the software.

"The essential point is that Google's strategy is to lead the creation of an open-source competitor to Windows Mobile," said an industry executive, who did not want his name used because his company has had contacts with Google. "They will put it in the open-source world and take the economics out of the Windows Mobile business."