Five Facts About Google Phone
Is Google (GOOG) Phone fact or fiction? Engadget says Google's entry into mobile phone business is for real, and the company is going to announce it soon. Scott Kirsner talked to a bunch of folks over who are intimately familiar with the effort and outlined …
Context & Ripple Effects
This is a rumor story as of September 2007, not an announcement: Engadget reported that Google would enter the mobile phone business imminently, and the claim remains unconfirmed. What gives it weight is the pickup — Scott Kirsner's reporting ran in the Boston Globe, and the Times of London followed the same week, evidence of how much attention a possible 'Google Phone' commanded even before Google said a word.
The rumor also lands alongside something concrete: a confirmed Google patent application for an SMS-based text message payment system, read by Search Engine Land and Download Squad as a possible mobile version of Google Checkout under the working name 'Gpay.' Together, the two threads suggest Google is assembling a mobile stack — device rumors on top of a payments layer.
First-order effects
- If the Engadget-reported entry is real, carriers and incumbent handset makers gain a Google-branded competitor whose distribution edge is search and ad reach rather than retail shelf space.
- Google Checkout gets a documented mobile path through the SMS payments patent, putting Google in line to compete directly with operator billing for small transactions.
Second-order effects
- Operators facing a Google device would push back on the layer they still control — deck placement, revenue shares, and which services get network access become the bargaining chips.
- Rival internet companies reading the same rumors must choose between partnering on devices and building their own, because a Google-controlled handset could default users into Google search, ads, and checkout.
Third-order effects
- If the software-company-into-devices pattern holds, handset value shifts from hardware makers toward whoever owns the default services, eroding the gatekeeper position carriers have held over mobile content and payments.
- Mobile payments move from closed carrier-billing systems toward open, internet-style rails if Google's SMS-based model proves viable.
The trend: Google is extending its PC-web franchise — search, advertising, checkout — onto the mobile handset, with a Google-built device rumored as the delivery vehicle.