Last weekend Google released "Google-branded" phones to some employees, fueling reports it will sell its own handset directly to consumers by 2010. Yet Google has been cryptic about its wireless strategy and its motives remain shrouded.
Until now, Google has focused on developing Android, its own mobile software platform for the wireless phones, and licensing it for free to handset makers such as Motorola, Samsun Electronics and HTC Corp. Just as recently as last month, a senior executive insisted Google had no plans to compete with its handset partners by making its own phone.
Many industry analysts think Google should stick to that pledge. By producing its own phone and selling it directly, Google could alienate handset partners and actually harm its main goal of getting the company's software onto more mobile devices.
What's more critics say, Google would be entering a lower-margin business in which it has little expertise, as well as fundamentally alter its DNA as one of the most creative software companies in the world. Success in hardware requires huge economies of scale and massive capital investiment, but much like the computer industry, profits have steadily been squeezed as the handset business is commoditized. The bigger profits lie in software development, experts say.
Article by: Jeffry Batash, Wall Street Journal
Edited by: Libby Lucas, Carolina Computer Partners
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