Google Phone: Blockbuster or Bust?

Sam Gustin writes: Today, T-Mobile will announce the first Google-branded mobile phone, which features the search giant's mobile operating system, called Android.

Will the Google Phone be a blockbuster -- or just a bust? My answer: neither. The new phone -- manufactured by Taiwanese cell-phone maker HTC -- won't make major inroads in the cell phone market, and it certainly won't pose an imminent threat to Apple's iPhone or Research in Motion's BlackBerry.

But that's not Google's point, at least in the short term. Instead, Google's mission here is bigger than a flashy new device. The company is hoping Android will point in a new direction for the mobile phone market -- an open environment where customers can mix and match devices and software.

Last year, when Google unveiled Android, company chief executive Eric Schmidt called the effort "more ambitious than any single 'Google Phone.'"

"Our vision is that the powerful platform we're unveiling will power thousands of different phone models," Schmidt said, adding that the company hopes to "shape a new computing environment that will change the way people access and share information in the future."

Google is positioning itself against Apple, which has bet on the iPhone's "locked" handset model -- available only through AT&T. In contrast, Google has championed an "open" model, not only by basing Android on open-source technology, but also in its successful effort to open up the 700Mhz wireless spectrum auctioned off by the F.C.C.

Although Google did not win the highly coveted C block wireless spectrum, the company did win F.C.C. approval of two "open access" provisions that require the winner of the spectrum -- Verizon Wireless -- to allow consumers on its network to mix and match handsets and applications.

As it makes its first steps into the cellphone market, Google's emphasis on the long-term is prudent, because the company hasn't really proved itself in any other area besides its core Web advertising business -- with the possible exception of YouTube, which dominates online video, but has yet to fashion a profitable revenue stream.

In web search advertising, Google is king, and has made an enormous amount of money during its reign. But from Google Checkout -- its online payment system, to Google Docs -- its Web-based software suite, to Google Chrome -- its new Web browser, the company has not delivered a product as vastly superior to the competition as its iconic search engine and the advertising system it built to capitalize on it.

Don't expect that to change today.

Like Chrome, Android is less about a major new market entrant, and more about a proof-of-concept test that highlights the direction Google would like to see the market go. In both cases, the company has championed an open-source model favored by its founders that is meant to wrest control of the market from dominant players -- Microsoft, which makes the market-leading Internet Explorer Web browser, and Apple, which makes the hottest mobile phone on the planet.

There will be a lot of heat and light about the Google Phone today, but just like Chrome, this is not about a new gadget, it's about the future of mobile software.