A move into the hardware business would be a huge shift for the Internet search giant - promises to turn the cell phone industry on its head. Fortune's Michal Lev-Ram reports.
FORTUNE Magazine, By Michal Lev-Ram, Fortune reporter
October 10 2007: 10:16 AM EDT
SAN FRANCISCO (Fortune) -- Google built its empire on the search engine business, and now it appears to be quietly working on the product that Wall Street analysts say will help company shares break the $700 mark - the mobile phone.
Just hours after Lehman Brothers issued a report stating that the so-called Gphone "could launch as early as February 2008," Google (Charts, Fortune 500) announced it purchased Jaiku, a Helsinki-based company that develops blogging software for the mobile phone.
"The mobile world has much greater reach than the wired Internet," says Avi Greengart, a principal analyst with research firm Current Analysis. "Google sees this as the future."
Google's bold entry into the cell phone market promises to shake up the $127 billion wireless industry. The company has made no secret of its goal to make mobile phones free for consumers, where revenues are generated through advertising and no single carrier has a lock on users.
In the short run, the Gphone also threatens to dethrone the Apple iPhone as the wireless industry's newest star. Google and Apple (Charts, Fortune 500) have worked closely in the past, but the Gphone could test that cozy relationship and force Apple to make the iPhone a more open device than it is today.
A Google spokesperson would not comment on the company's plans, but there's no question that Internet giant has ambitious plans for the mobile market.
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