Google’s Mobile-Handset Plans Are Slowed (USA)

Google Inc. is learning that changing the cellphone industry isn’t easy.

The Internet giant and more than 30 partners announced in November a bold plan for a new breed of handsets based on a suite of mobile software called Android. At the time, Google said it planned to have the new phones on the market by the second half of this year.

Google now says that the handsets won’t arrive until the fourth quarter. And some cellular carriers and makers of programs that work with Android are struggling to meet that schedule, people familiar with the situation say.

T-Mobile USA expects to deliver an Android-powered phone in the fourth period. But that launch is taking up so much of Google’s attention and resources that Sprint Nextel Corp., which had hoped to launch an Android phone this year, won’t be able to, a person familiar with the matter said.

China Mobile, the largest wireless carrier in the world with nearly 400 million subscriber accounts, had planned to launch an Android phone in the third quarter but it has run into issues that will likely delay the launch until late this year or early 2009, a person familiar with the matter says.

Meanwhile, the Android software has yet to win broad support from large mobile-software developers. Some say it is difficult to develop programs while Google is making changes as it finishes its own software.

This month Apple Inc. created a stir when it unveiled a cheaper, faster version of the iPhone that supports slick games and entertainment services. While Apple controls most aspects of hardware and software development for the iPhone, Google has to rally many different hardware, service and software providers to support its technology platform.

There is no evidence that Android won’t be able to gain momentum over time. But wireless carriers throughout the industry are confronting challenges as they seek to customize the Android software — which includes an operating system and programs that work with it — to promote their own Internet services. Some handset makers are taking longer than they thought to integrate Android, test it and build custom user interfaces to meet carrier specifications.

Those challenges are affecting large cellphone makers like Samsung Electronics Co. and smaller ones that are aiming to provide devices that will be branded by carriers, people familiar with the situation say. Samsung didn’t respond to requests for comment.

Andy Rubin, director of mobile platforms at Google, says managing the software-development effort while giving its partners the opportunity to lobby for new features takes time. “This is where the pain happens,” he says. “We are very, very close.”

One hold-up at Sprint is that the carrier would like to develop its own branded services based on Android, rather than just carry a phone with the built-in features Google plans to offer, the person familiar with the situation says. A management shake-up at Sprint, which brought in a new chief executive this year and, more recently, a new executive overseeing product development, may have also contributed to the delay. Sprint is now considering scrapping plans for an Android phone for its current third-generation broadband network and developing one that will work on the faster “4G” network it is helping to fund along with several partners, including Google, the person adds.

China Mobile and a cellphone maker it is working with have had trouble translating the Android software from Roman characters into Chinese and have had difficulty merging China Mobile’s own branded data services into it, the person familiar with the matter says. A spokeswoman for China Mobile declined to comment.

AT&T Inc., the U.S. carrier for the iPhone, is still working with Google to determine if it is feasible to launch an Android phone.

Google’s Mr. Rubin declines to discuss specific partners. But he says Google is working hard to help them develop new features and drive down costs, collaborating with chip makers and other technology providers so handset makers and carriers don’t have to design Android-based phones from scratch.

Google has provided prototypes for carriers and handset manufacturers, though their final versions are likely to vary greatly. One prototype has a long touch-screen, similar to the Apple iPhone, a swivel-out full keyboard, and a trackball for navigation similar to the kind on some BlackBerrys.

For Google, the struggle likely will be worth it if the company can build a big foothold in the mobile market. The Mountain View, Calif., company dominates search on the personal computer, but it also wants to play a central role as Internet activity and eventually advertising dollars move to cellphones.

Until recently, wireless carriers have often called the shots on what consumers see on cellphones, taking a cut of revenues from providers of add-on services and software. Google is trying to make the process more open and less expensive. It is making Android available to handset makers for free — hoping the investment will eventually pay off in advertising revenue — and on an open-source basis that makes it easier to add custom programming.

Meanwhile, rivals have a head start. Apple, for example, expects to sell 10 million of its iPhones this year. Research in Motion Ltd., which has roughly 14 million BlackBerry subscriber accounts, recently announced a new BlackBerry device that makes it easier for consumers to download music, watch videos and browse the Web. Microsoft Corp. also has a sizable position in high-end cellphones.

Google executives say the company eventually hopes to power many cellphones at various price-points. But the company is likely to start by zeroing in on higher-end phones that have hardware features to handle advanced services.

The effort hinges on convincing partners to exploit the operating system, which supports capabilities such as the ability to build applications that know a phone’s location. Some software developers already have built flashy demos, ranging from security software that scans a person’s iris to an address book integrated with instant-messaging and other tools. Google says it has received roughly 1,800 submissions to a contest for developing Android-based application programs.

But some developers say it is easier to work with Apple’s programming tools than Google’s because of the familiarity with the company’s Macintosh operating system. As a result, a wide range of software companies have been scrambling to build new iPhone applications.

Apple and RIM “have superseded the excitement and hype” around Android, says Nihal Mehta, co-founder of Buzzd Inc., a location-based city guide and social network. Mr. Mehta says the company prioritized its iPhone application over an Android version because Apple’s guidelines are easier to follow and there aren’t any Android phones in the market to use in testing software.

Others developers cite hassles of creating programs while Android is still being completed. One is Louis Gump, vice president of mobile for Weather Channel Interactive, which has built an Android-based mobile weather application. Overall, he says, he has been impressed by the Google software, which has enabled his company to build features such as the ability to look up the weather in a particular neighborhood.

But he says Weather Channel has had to “rewrite a few things” so far, and Google’s most recent revision of Android “is going to require some significant work,” he says.

Others — such as Greystripe Inc., whose technology inserts ads into mobile games — are staying away until Google clarifies key points, such as how applications will be distributed and how developers will earn revenue from them.

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