UPDATE 2-Rivals dismiss threat of Google mobile platform

Mon Nov 5, 2007 9:57pm GMT

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FRANKFURT Nov 5 (Reuters) - Rivals of Google Inc (GOOG.O) cast the Web search leader as a late entrant to the cell phone market, saying its planned mobile phone software may boost Web use on handsets but without threatening entrenched players.

Analysts, however, said Google could have the means to disrupt the status quo in the wireless industry, which is dominated by a handful of large phone makers and regional service providers that often tightly control customer choices.

Google's plans, announced on Monday, pit it against companies such as handset leader Nokia Oyj (NOK1V.HE), Microsoft Corp (MSFT.O), Apple Inc (AAPL.O) and Blackberry maker Research in Motion RIM.TO. These companies all back different mobile operating systems.

Rivals generally brushed aside the idea that Google's plan could spell their products' doom.

"If Google was not involved the industry would have just yawned and rolled over," John Forsyth, strategy chief at British mobile phone operating system maker Symbian, told Reuters. Basing the platform on an open-source, collectively designed Linux operating system would be difficult, he said.

Nokia Oyj (NOK1V.HE), which owns 48 percent of Symbian, was the most conspicuous absentee from Google's list of more than 30 collaborators on its open-source mobile software project.

"We don't see this as a threat," a Nokia spokesman said.

A spokeswoman for UIQ, a smartphone software firm owned by phone makers Sony Ericsson (6758.T)(ERICb.ST) and Motorola Inc MOT.N, said: "Generally, it's positive for the industry."

Google said it would work with some of the world's largest telecoms players, including operator T-Mobile (DTEGn.DE), chipmaker Qualcomm Inc (QCOM.O) and Motorola, to develop an open software platform named "Android" for mobile devices.

Analysts said the platform could give Google a headstart in the burgeoning mobile advertising market, which has been hampered by lack of agreement on standards and handset design.

"Google coming into any market is an important step, no matter how they come into it. They're too big to dismiss at any stage," said Shaun Collins, analyst at telecommunications research firm CCS Insight.

One key will be whether the Google platform draws support -- and cell phone developments -- that make it compelling.

"The potential is there for this to be a game-changing development but it remains to be seen. This is a set of tools that have to be turned into something," said Greg Sterling, an analyst at Opus Research in San Francisco.

Apple, creator of the much-lauded iPhone, was also absent from the new alliance, but Apple spokeswoman Natalie Kerris said Google was still a key partner.

"We have a great relationship with Google and this doesn't change anything," she said. "They are certainly an important partner for iPhone."

Microsoft also played down the threat posed by Google, which has outmaneuvered Microsoft in the lucrative multibillion-dollar Web search business.

"It really sounds that they are getting a whole bunch of people together to build a phone and that's something we've been doing for five years," said Scott Horn, general manager of marketing at Microsoft's Windows Mobile business. "I don't understand the impact that they are going to have."

Microsoft has forecast that more than 20 million handsets running Windows Mobile software will be sold in the business year to June 2008, nearly double the amount sold last year.

Symbian, whose operating system is behind almost three-quarters of the world's smartphones, said Google was not to be underestimated but faced a hard task.

"We have been going nine years and have probably seen a dozen new platforms come in and tell us we are under attack," Symbian's Forsyth said. "We take it seriously but we are the ones with real phones, real phone platforms and a wealth of volume built up over years."

Google was "swimming against the tide" by trying to create a standard around Linux -- which is free for anyone to develop subject to conditions about commercial use, he added.

"We have seen several attempts to create some sort of standard out of Linux ... but Linux is fundamentally fragmentary," he said. "Linux is unmanaged and unmanageable." (Reporting by John Bowker in London, Tarmo Virki in Helsinki, Daisuke Wakabayashi in Seattle and Adam Cox in Stockholm; Writing by Georgina Prodhan; Editing by David Holmes and Braden Reddall)

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