Rumors of the Google Phone's transformative powers are greatly exaggerated, I think. It's not that Google isn't capable of making an awesome piece of hardware. They might be. But Google is a paid advertising company -- ads account for 90 percent of its revenue -- and a free software company. Why does it need to build its own phone again?
Slate's Farhad Manjoo, who has a habit of hitting these things square on the head, makes some sense:
Google's platform independence isn't meant as altruism--it's good strategy. The company gets the vast bulk of its revenue from advertising. Thus Google has no business reason to care whether I got on the Web using an iPhone, a Droid, a BlackBerry, or a Windows 7 desktop--all it cares about is that I got on the Web at all and that I stay on the Web all day, every day.
But all that will have to change if Google gets into the hardware business. How do you market a phone? By promising that it will do things that no other phone can do. In other words, for the Google Phone to be truly stellar, Google would have to imbue it with exclusive features--violating the core Google principle of platform independence.
I just don't see that happening; it's not in the company's DNA to make software that works on one device alone. Rather, I'll bet that Google makes every feature that it shows off on the Google Phone available to every other mobile device. Will there be a single Google Phone? No--every phone will be a Google Phone.
Reading this I thought about Microsoft. Microsoft is a software company too. A decade ago, Microsoft Windows dominated computer operating systems much like Google search dominates the search ad industry. But then something happened. Apple started catching up. The reason has something to do with Microsoft's inferior software (Vista was a certain bomb) but I think it also had to do with the inferior PC hardware that ran Windows. Apple computers just ran better, and Microsoft was partly doomed by the failure of actual PC computer hardware to keep up. Do you see where I'm going with this?
Maybe Google is building its own phone to avoid becoming the next Microsoft, doomed by the inferior hardware on which your software company depends. Google has always said that the next Google is probably something that hasn't been invented yet. What if it's a company that brilliantly merges online calling service for smart phones with mobile advertising that helps subsidize the cost of that online service, making it incredibly affordable for callers and incredibly lucrative for the company? What if they partner with a phone that's so evidently superior -- an iPhone with service, perhaps -- that they capture the up-market, and then the medium-market, just like Apple computers? I'm guessing it's that fear that animates Google to take hardware matters into their own hands.