Analyst: Google Phone Won't Ding Apple's iPhone

An industry analyst said a Google smartphone made by one vendor would be preferable to devices that pair hardware from Motorola, HTC and others with software and services from Google. However, such a device is unlikely to ding Apple's iPhone.  

Rumors of the so-called Google Phone resurfaced Nov. 17 when TechCrunch reported that Google is building its own phone, which is being produced by a major phone manufacturer but will only have Google branding.

The report angered industry watchers who believe such a move would fracture the open-source development community that has coalesced around the Google Android mobile operating system, an open-source alternative to proprietary mobile platforms from Apple, Palm and Research In Motion. After all, the Android ecosystem appears to be flourishing, with Verizon Wireless teaming with Motorola and HTC to sell the Droid and Eris, respectively.

While tempers flared over the issue, BroadPoint AmTech analyst Mark McKechnie took a more temperate view of the idea, arguing the pros and cons of such an announcement in a research note Nov. 19. McKechnie thinks the device is a go:

"Although there has been chatter for years about a Google phone, we think this time it is different and that there may be some truth to the current news flow about a GOOG-branded phone/mobile device. While our discussions with Google have consistently elicited 'no comment,' the company has also repeatedly passed on the opportunity to dismiss the idea."

The analyst, who reported that Motorola is on pace to sell 600,000 Droid units this year, said a Google phone would be a fine growth opportunity for the search engine as it seeks to extend its tendrils on the mobile Internet.

Even though Android is getting solid traction with consumers, OEMs and wireless carriers, a Google Phone would, like Apple's popular iPhone and RIM's BlackBerry line, be an integrated hardware-software solution, providing smoother performance. McKechnie added:

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