Gphone Powers Google to New Highs

The new Android platform for smart phones has been anticipated for months now, with traders were bidding the stock up well in advance of the announcement.The first Gphones should ship in the second half of next year, and are guesstimated to grab 2% market share in 2008, with that number likely to rise sharply, although ultimately many questions remain.

Traders chasing the shares might not have realized their is no hardware in Google's Gphone-it is a software model. But we will leave it to an expert to explain, in plain English:

Google’s approach is to create a “stack,” or set of applications that sit on top of each other and work with each other. Starting from a Google-designed handset operating system, the alliance will have software that cell phone companies can mix and match so that they can design handsets that match their particular market aims.

The first phones from the alliance will be out in the second half of next year from manufacturers who are members of the alliance: Samsung, LG, Motorola, and HTC. Eight different carriers from around the world plan to offer service based on the phones. Those include Sprint and T-Mobile U.S.A. in the United States, NTT DoCoMo and KDDI in Japan, T-Mobile International in ten European countries and the United Kingdom, China Mobile in China, Telefonica in Spain and Telecom Italia in Italy.

Is this a good idea? I think so. The cell phone industry is the latest that needs to go through the same evolution that the computer business has been through. You should be able to get cheap, standardized hardware and software. The Google alliance is a kind of precursor to being able to take your handset from one service provider to another. Dean Takahashi Tech Talk

Google is taking on some pretty entrenched competition, although Palm might not exactly scare the Androids. We might have more on this later.

Google’s stock is up 45% in the last three months however, and is a market darling in the current large cap growth environment that is notable for its narrow leadership. The market cap gains in Google since the sprint from $500 are equivalent to adding Research in Motion’s current market cap to Google’s mid-August value. Heady stuff.

Of course, people bought the stock on the Gphone rumor. Are they going to sell the news?

Sell or hold, check out the video below where the nerds explain the Gphone, and introduce Andy Rubin’s dog.

The Gphone is more like an open source cell phone alliance
Dean Takahashi San Jose Mercury News

Open Handset Alliance
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