Google Reveals 34-Member Open Handset Alliance, Open-Source Mobile Platform

The Alliance aims to “develop technologies that will significantly lower the cost of developing and distributing mobile devices and services,” Google said. Members are contributing intellectual property to be released under the Apache v2 Open Source license, adding Android support for chipsets, making Android-based handsets and promoting industry support. The Alliance plans to release Android handsets and services in the second half of 2008; an “early access” software developer’s kit is due next Monday.

Google’s formation of the coalition is part of “an effort to make the value chain in the wireless mobile world more like the value chain in the fixed broadband/Internet world, in which Internet applications and services are developed more independently” of carriers and device makers, Stifel Nicolaus said in a note. In the U.S., network operators have historically controlled development of applications running on their network, it said.

Such a group is not groundbreaking, said Current Analysis’ William Ho. The Alliance “is not unlike other previous mobile Linux [groups] except the players they've assembled have much more clout,” he said. “In a nutshell, it’s a platform announcement that seeks developer community adoption to further innovation in the mobile space.”

Android’s open nature will make writing cellphone applications as easy as Internet programs, Google said. Third-party software developers also get unprecedented access to handset features, it said. For example, “an application could call upon any of the phone’s core functionality such as making calls, sending text messages or using the camera,” the Alliance said. Unlike existing mobile platforms, Android “does not differentiate between the phone’s core applications and third-party applications,” meaning applications have “equal access” to phone capabilities regardless of who developed them, it said.

Developers can create applications that combine Web information with data on the user’s phone, the Alliance said. For example, an app could meld mapping data on the Web with a user’s contacts list to map friends’ locations on the user’s cellphone, the Alliance said. Android also supplies developers with “a wide range of useful libraries and tools,” including device location tracking and peer-to-peer communication, it said.

Android also gives users greater customization of phone software, the Alliance said. Users may “fully tailor” the phone and can “swap out the phone’s homescreen, the style of the dialer or any of the applications,” it said.

T-Mobile and Sprint offered few details about Android support. T-Mobile plans to launch wireless Internet services for customers in the U.S. and Europe in 2008, said Rene Obermann, CEO of T-Mobile parent Deutsche Telekom. Sprint supports the Alliance’s open-source aims, but “has not agreed to do anything at this point,” a spokesman said.

Sprint and T-Mobile are participating to better compete against AT&T and Verizon, the top two U.S. carriers, Ho said. “This is differentiation for them against the big guys,” the analyst said. However, Sprint probably will make Android only part of its WiMAX Xohm “and not their standard wireless business,” he said. Limiting Android to Xohm is “not our intention at all,” a Sprint spokesman said. It’s too early to give specifics, but Sprint will bring the open platform to its CDMA network if it announces support, he said.

Verizon hasn’t “ruled out” joining the Alliance, a spokesman said. “Verizon Wireless shares the goal of more open mobile application development… We welcome the support of Google, handset makers and others for our goal of providing more open development of applications on mobile handsets.”

Questions remain about what the business model will look like for carriers, particularly how revenue will be shared, Ho said. Carriers won’t want a situation where their networks act as bit pipes, he said. “If this is an extension of the desktop in access and experience I would be worried as a carrier.” Android could disrupt carriers’ long-term ability to get revenue from mobile broadband, “particularly through advertising that the network operators were hoping to be in a premium position to capture,” Stifel Nicolaus said. Google is creating an “alternative platform that will make that more difficult.”

The announcement could also crush Nokia’s and other handset makers’ models, Stifel Nicolaus said. Nokia, which recently acquired map maker Navteq and announced a music service is trying to make itself a content owner and creator, the analyst firm said. A development platform separated from the device like Android “makes it more difficult to monetize upstream revenues from [Nokia’s] leadership position in manufacturing devices,” it said.

The announcement “logically reduces Google’s incentive to bid in the 700 MHz auction, as it now has negotiated user access to its applications on two of the national data networks in the United States,” Stifel Nicolaus said. However, Google probably won’t “change its public position on the auction” and will still file an auction application on Dec. 3, the analyst firm said. Also, Google still has incentive to bid for the C-block “to make sure the reserve price is met and the openness condition is maintained” since it could put Android onto that open network, it said.

Google’s announcement is a “non-event” for open access and a “huge yawner,” said Txtbl CEO Amol Sarva, a member of Frontline Wireless’ Open Access Advisory Council. The Alliance is “just another consortium” and “only scratches the wireless industry’s problems,” he said. Android opens mobile software but doesn’t open the existing vertically integrated wireless network representing the greatest barrier to mobile entrepreneurs, he said.

Another open access advocate seemed more encouraged by the announcement. “This project shows the value that most of the wireless world places on opening up cell phones and wireless services,” said Public Knowledge president Gigi Sohn. “The FCC, and leading American cellular companies, should take notice and realize that this trend is one they will not be able to stop.”

That open access opponent Verizon is not involved in the Google coalition is cause for relief, Sarva said. The Wall Street Journal reported last month that Google and Verizon were talking about 700 MHz auction strategy; a deal between the companies would represent a Google reversal on its pro- open access stance, Sarva said. Sprint and T-Mobile’s Alliance participation does not pose a similar threat to open access initiatives, he said. However, Monday’s announcement doesn’t mean Verizon-Google talks have dissipated, Stifel Nicolaus’ Blair Levin told us. Google says the Alliance announcement has “nothing to do” with the spectrum auction, he said. “Talks are ongoing.”

Google’s announcement “will set off a new round of arguments in the net neutrality debate,” Stifel Nicolaus said. Opponents to net neutrality rules “will point to today’s announcement as evidence that no legislation or regulation is needed. Proponents will argue that the announcement does nothing to change the need for government action.” CTIA and Public Knowledge followed formula. “If ever there was evidence that so-called ‘net neutrality’ rules were not needed, today’s news is it,” CTIA said. “Because the government has never dictated a single technology or business model, companies big and small are constantly entering the wireless marketplace to put forward innovative mobile products and services that consumers want and need.” Google’s announcement has “nothing to do with net neutrality,” Public Knowledge’s Art Brodsky countered. CTIA is merely using the announcement as a platform to reiterate its argument against open access, he said. Verizon agreed. “Yet again, the highly-competitive wireless industry is demonstrating that neither legislation nor regulation is required to produce innovation,” a spokesman said.