Once more Google is the frienemy, so it should try not to enrage existing partners. It could do this by granting them the lion's share of advertising revenues (in both the PC and the wireless spaces). Google has the technology (apps, user experience) and the advertiser relationships and could try to maximize volumes.
As to the DIY side, Om Malik provides a good point to start as it contains links to the Boston Globe (an article citing several industry execs who have seen prototypes but are under non-disclosure agreements with Google), to Engadget (on the OS) and a much-quoted blog post from Simeon Simeonov.
I believe the rationale is quite straightforward:
- Extend its reach beyond the PC into mobile markets. Sooner or later, broadband will be ubiquitous (anywhere, any device).
- Join the FMC (fixed/mobile convergence) trend. FMC is played from both ends. Mobile operators not only aim for FMS (substitution), but they are adding fixed services at the same time. Fixed operators not only launch the triple play, but the quad play as well.
- Leverage its brand name. The mobile world (unlike the PC/Mac world) is controlled by operators who have an iron grip on their networks and the applications that will run on them. If Google wants a share of the mobile advertising market, it needs control over more elements of the value chain. Its strong brand may just allow it to do so. (Compare similar efforts at Apple (iPhone) and Yahoo!, whereas Nokia just announced the launch of Ovi).
- 4G is coming. Both technology (GSM/LTE, CDMA/UMB, WiMAX, xMax and perhaps more) and spectrum (auctions coming up in many countries, including the US and the UK) are evolving toward a new generation. This is a good point in time to get on board.
To add to all this speculation, here is an overview of (rumoures of) wireless initiatives coming out of Google:
- Working on an OS and a handset.
- Several technology acquisitions, including: Reqwireless (mobile apps: browser, email), Skia (graphics software), Android (OS), Dodgeball (mobile social networking).
- Developing mobile versions of existing apps: Calendar, AdSense.
- Developing SMS delivery: real-time flight information, local search, payments.
- Bid in the upcoming 700 MHz auction in the US.
On the other hand, Google seems to be hedging its bets by forging deals with current wireless players:
- Deals with hardware makers to pre-install Google services: Samsung, Apple's iPhone, LG.
- Deals with mobile operators to support Google services: China Mobile, AT&T/iPhone.
- Support for existing OSs: Windows Mobile.
- Plans to establish an MVNO service in the UK.
- Investments in WiFi (Mountain View, San Francisco) and femtocells.
- Support of Sprint's WiMAX plans.