Google makes new push into mobile phones

Google on Tuesday opened a new front in its push into the mobile phone business with the launch of an online store to sell handsets and service from operators on both sides of the Atlantic.

However, it disappointed recent feverish anticipation that it was also about to launch the first purpose-built “Google phone” to compete head-on with Apple’s ground-breaking iPhone.

Instead, it revealed a new device made by Taiwan manufacturer HTC which, while displaying the Google brand far more prominently than other handsets, does not break new ground in the company’s involvement in mobile.

The online Google phone store will sell the handset with service from Verizon Wireless in the US and Vodafone in the UK immediately, but will quickly be expanded to include more handsets, mobile operators and countries, Google executives said. The early test countries, which also include Singapore and Hong Kong, are only the “first baby steps” in a global push, said Andy Rubin, head of the Google mobile software efforts.

Google’s move into online retailing marks its latest attempt to change the ground rules in the mobile business and to stimulate mobile internet use to boost its search advertising business.

However, analysts questioned whether its online store would be a hit with consumers. Buyers usually want to try out a new smartphone before buying one, making online sales a small market, said Ken Dulaney, an analyst at Gartner.

But Google said it hoped to simplify the buying process for consumers and reduce costs for mobile companies. At present, most mobile phone marketing in the US is backed by expensive TV advertising, and this could be made more efficient if it moved online, Mr Rubin said.

The new HTC phone, known as Nexus One, includes new software that Google hopes will build demand for its technology and steal thunder from the iPhone. The features include voice-recognition software.

The closely watched launch led to talk that Google was set to release its own handset to compete with Apple, as well as groups such as Motorola that already sell their own handsets with versions of the Google software. Repeating earlier statements that Google was not planning to get into the handset business, Mr Rubin said: “I said Google won’t build hardware. We’re software guys, we’re internet guys.”

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