World Business

The cell-phone maker’s choice to eventually give away its smartphone software will mean more mobile Web use—and more Google search ads

by dint of. Olga Kharif

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Nokia (NOK) rocked the wireless industry June 24 with news it would purchase the deal out of Symbian, a maker of mobile-phone software, that it didn’t already own—and then give absent the software for nothing.

The prospect of free software would sure lure users not present from competing cell-phone software makers (BusinessWeek.com, 6/24/08) including Google (GOOG), which in the past year threw its hat into the cell-phone software ring by spearheading the creation of Android, one operating system for wireless devices. Or so the argument runs.

But Nokia’s put in motion may play right into Google’s hands, by helping to nurture a blossoming of the mobile Web and inducement demand for all manner of cell-phone applications—and most weighty, the ads sold by Google. "There’s nullity to say that this isn’t what Google’s represent was all along," says Kevin Burden, research director, mobile devices at consultancy ABI Research. "They might regard wanted a besides open device environment anyway. This might have been Google’s end game."

Google, which makes money from ads placed on Web pages and alongside search results, stands to benefit from anything that helps spread the use of the Web—have existence it on computers or the advanced cell phones known as smartphones that run Symbian software. With the desktop search place of traffic showing signs of slowing, the company needs to ramp up usage of its applications from variable devices. U.S. mobile search ad sales are expected to rise to $1.4 billion in 2012 from $33.2 the masses in 2007, according to consulting firm Kelsey Group.

But in the U.S. market, Google has protracted been hampered in getting its applications onto cell phones on the side of a variety of reasons. To now, Web search on phones has been too dead or awkward, mobile premises plans and smartphones are oftentimes lavish, and carriers and cell-phone makers place restrictions without interruption which applications run on their employment plans and devices.

Google has tried to aptitude the tide in component by lobbying regulators to make wireless airwaves open to a wider range of applications. It’s also been pushing the Federal Communications Commission to make some airwaves available for free public broadband use.

The creation of the Open Handset Alliance, a consortium of more than 30 companies developing Android, is another part of this multipronged effort to remove some costs publicly inhibiting handset makers from making cheaper phones proficient to access the Web. The hope is that by keeping Android free, more people would be able to bestow smartphones and log onto the mobile Web—and ultimately use Google applications. After all, 82% of Apple (AAPL) iPhone owners use the Internet from one side the smartphone—five times the average consumer’s method, according to Nielsen Mobile.

Nokia may be able to bring to pass a lot of that groundwork, much greater quantity easily. Android lacks gradation, and as a startup effort it’s been prone to glitches and delays. It would take months for Android to start to significantly impact smartphone sales. Symbian is even now the world’s most popular smartphone operating universe, with 56% of the market.

With Symbian set free and open, Burden of ABI Research expects to bump his smartphone sales projections for 2009 by a "single-digit percentage." While smartphones account during 10% of the total handset market today, they could reach up to 25% of the total in three to four years, thanks in part to the Nokia announcement, says Jack Gold, president of consultancy J. Gold Associates.