Google plans to get inside your phone

The Google logo is photographed on a camera phone.

TEXT OF INTERVIEW

KAI RYSSDAL: Google made a big announcement today. Even though it drove shares up almost 2 percent, the news might have struck some as underwhelming. To the dismay of gadget geeks everywhere, there will be no Google phone. But what the company does have planned could turn out to be an even bigger deal. Kevin Delaney covers Google for the Wall Street Journal.

Kevin, good to have you with us.

KEVIN DELANEY: Great. Thank you.

RYSSDAL: So what we have here is not the G-phone, the Google phone, but something else really entirely. What is it?

DELANEY: Well, Google is releasing, with a bunch of partners, handset makers, carriers, there are about 34 of them in all, this thing it calls Android. And Android is a software platform for cell phones. And basically what it does is it's the software that runs inside your cell phone. It's Linux-based, it's all the sort of software that cotrols what your cell phone does, and Google and these others are making this software available free and open-sourced for basically anybody who makes a cell phone to use. And they say it's going to bring some advanced features to cell phones when the phones that run it start hitting the market for consumers in the second half of next year.

RYSSDAL: I'm gonna go way out on a limb here and guess that this all has something to do with Google advertising on your cell phone and making that work. Right?

DELANEY: Yeah. You got it. You're all over it.

RYSSDAL: You know in theory now, Google has a customer base. I guess an audience base that is the whole Internet, right? And what it's trying to do is expand that to everybody on the planet with a cell phone.

DELANEY: Correct. There are about 3 billion cell phones out there, or something like that, and far fewer PCs in the world. And Google's taking this sort of broad view that you know for years the cell phone carriers and the handset makers have not made it paticularly easy for Google to get their services in any visible way on their handsets. And Google's basically decided to try and sort of blow up their model and blow up the walls a little bit and get themselves in there by providing easy access to the Web, where Google has all these ads, and some other applications that Google will benefit from.

RYSSDAL: I think I heard you say at the beginning that they're gonna give it away. How are they gonna make money if their giving it away? Just by those ad revenues?

DELANEY: Yeah, exactly, it's by the ad revenues that Google's gonna do it.

RYSSDAL: What's the incentive for these handset makers, these phone companies to participate with Google and to put its software on their pieces of equipment?

DELANEY: Yeah, that's a really good question. The handset makers and the carriers have really struggled with Google's presence busting in on their industry. The carriers struggle with it more. But what we're seeing is that Google's giving away software is actually a pretty attractive thing. Google says that software represents about 10 percent of the cost of a handset. Plus, carriers see a potential revenue stream in this ad revenue that Google said it's likely gonna share and I think that's part of the answer, that there are benefits to the carriers. Although, a lot of them are still pretty concerned about whether Google might eat their lunch in the end.

RYSSDAL: Let me ask you very quickly about the consumer experience. When I fire up my new wizz-bang, not-a-G-phone-but-with-Google-software-on-it phone next fall or whenever this comes out, am I gonna see the big Google logo someplace? Am I gonna know?

DELANEY: Well, you know, they're releasing this as open source and so people can -- the handset makers and the carriers can -- use it anyway they want. And that includes including or taking off the Google logo. Google's negotiating, with the carriers especially, to have Google prominently on any devices that use the software. You gotta believe they've got an in to do this. So that your default search engine might be Google or your homepage might be Google when you boot up this browser. And Google executives have not ruled out that there won't be a G-phone at some point. They're very coy in speaking with journalists today and they said you know if there's going to be a G-phone Android, this software that they're releasing, would be the platform upon which it would be built. So there's still a chance that we might see Google devices coming into the market at some point in the future.

RYSSDAL: Kevin Delaney's a senior writer for the Wall Street Journal. He covers Google out of their San Francisco offices. Kevin thanks a lot for your time.

DELANEY: Great, thank you.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.

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