Verizon Snubs Google's Platform

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170 Million Smartphones?

It's a big opportunity. Analysts figure the smartphone market being targeted by the likes of Apple, Microsoft, and London-based Symbian, which is backed by Nokia (NOK), will amount to about 170 million units this year. By comparison, unit sales of feature phones of the sort that could run LiMo or Android should top 300 million. By 2012, figures New York market watcher ABI Research, some 127 million mobile gizmos will be running some form of Linux, up from 8.1 million last year.

With Verizon's move, LiMo now looks to have the upper hand. "When it comes to traction in the market, commitment, road map, and software maturity, LiMo is a long way ahead of Google," says stock analyst Richard Windsor with brokerage Nomura Securities in London.

On May 14, LiMo also announced seven other new members: French mobile operator SFR, Korea's SK Telecom, chipmaker Infineon Technologies (IFX), French handset maker Sagem (SAF.PA), Norwegian software developer Siving Egil Kvaleberg, browser company Mozilla, and Red Bend Software, a developer of mobile management tools. U.S. chipmaker Texas Instruments (TXN) also recently joined. LiMo's executive director, Morgan Gillis, says the group is in advanced negotiations with other wireless operators and handset makers in Asia, Europe, and Latin America.

Hedging Their Bets

Vodafone already has introduced several Motorola handsets built on LiMo and plans to add others to its network later this year, says Guido Arnone, director of products and technology at Vodafone and vice-chairman of LiMo. And more than 10 million phones per year are expected to migrate away from a Japanese flavor of Linux to LiMo over the next two years, says Kiyohito Nagata, managing director of products and services at NTT DoCoMo, and chairperson of the LiMo Foundation.

To be sure, some companies, including DoCoMo, are hedging their bets. The Japanese operator also belongs to the Google-backed OHA, as do Motorola and some other LiMo members. More than 30 companies have joined the OHA, which aims to develop technologies for mobile services and technologies, with the Android platform serving as a first step. The OHA describes its target as a software environment including an operating system, middleware, user-friendly interface, and application programs.

The trouble is that operators say they are not sure to what extent the applications—namely Google's—can and will be separated from the operating system. Indeed, Vodafone Chief Executive Arun Sarin has said publicly that his company won't support Android until it knows exactly what Google plans to do with the data it can collect via phones. Operators aren't willing to cede information about their customers that Google could leverage for its advertising business, says CCI Insight's Blaber.

Google executives counter they're getting into operating systems only to ensure that an open-source mobile phone really goes forward. Eric Chu, Google's group marketing manager for Android, dismisses talk that the software isn't catching on. "We know there will be carriers and handset makers that are going to deploy it," he says. "The level of activity around Android has been extremely high."

$250,000 Prizes

As proof, he mentions the Android Developer Challenge, a contest to identify promising new mobile applications. Google already has received 1,800 submissions from 75 countries, two thirds of them from outside the U.S. Ten top winners will receive $250,000 each to develop their programs, while another 10 runners-up will each get $100,000.

Analysts predict that Taiwan's High Tech Computer (HTC), which does not have an operating system of its own, will be the first handset vendor to make phones incorporating Android, and that T-Mobile will probably be the first operator to offer the phone. But they predict that few devices will be on the market by the end of the year and that the first version is likely to be imperfect.

Christian Lindholm, a partner and director in the London office of Fjord, a strategic design consultancy who is credited with being the father of Nokia's Series 60's user interface, says Google may be underestimating just how tough it is to build a mobile operating system. "The integration of the hardware and software is ridiculously hard," says Lindholm. "To get a real proper user experience, you need a deep fusion between software and hardware."

Many of the same challenges face the LiMo Foundation. But whichever initiative first manages to produce a user-friendly Linux mobile operating system with global uptake will create a seismic shift in the industry. "These are big bets," says Lindholm. "Whoever wins is going to win massively."

With reporting by Olga Kharif in Portland, Ore.