Here Comes the GPhone

The Wall Street Journal (sub. req.) reports on the possibility of the long rumored Google phone. Google has a few different avenues, The Journal reports: partner or build.

Partnering would require the perennial challenge of working with carriers that now seem unwilling to cede control (or the type of search revenue share that Google is asking for) to make this happen. This defeatist position on the part of U.S. carriers has been the No. 1 detriment to mobile local search innovation and application development.

As we’ve mentioned in the past, the Web browsing capabilities of the iPhone could be the avenue through which search app developers can finally sidestep the carrier control over the home screen of devices that run on their networks.

A phone from Google could also do this, if the company pushes its weight around enough, to appeal to carriers with an enticement of brand appeal and revenue boosting possibilities for data consumption, amid hyper competition and falling revenues in the mobile voice arena. Sound familiar? This is precisely how Apple got in bed with AT&T for the iPhone.

The iPhone will soon become compelling enough that other carriers will have to adopt, despite worries over enabling a device that has Wi-Fi capability, an elegant browsing experience and other things that could allow consumers to sidestep consumption of carrier voice packets (Wi-Fi-enabled VoIP is one concern here).

This will take approximately two years to happen (the length of AT&T’s contract with Apple). The same thing will happen with a prospective Google phone. Carriers will come around out of necessity to compete. Give it time.

Time to Build?

Google’s other possible avenue, which could be very interesting to watch, is to snub its nose at carriers altogether and buy its own wireless spectrum – something it has indicated it would like to do at an upcoming government auction for a swath of open spectrum.

This would essentially make Google its own carrier, with lots of power to do things that carriers aren’t able or willing to do. More important, it would give Google a direct channel to consumers to do all the things that it has only been able to do in watered down form (Gmail for mobile, mobile maps, etc.) through the carriers. This would cost billions and likely land Google in a position, like the carriers, of being overly protective of that investment.

I’m not sure which avenue would be better for consumers, and Google could essentially do both as it forms mobile partnerships and slowly builds its own network, which will take a few years. Carriers will meanwhile try unsuccessfully to block such efforts, but again they will partner with Google out of short-term competitive necessity.

Either way, we can expect to see a great deal more innovation (finally) in the mobile local search area. The Gphone itself is rumored to be free to consumers and completely ad supported – a novel concept in telecommunications. This could also importantly accelerate advertiser adoption of mobile marketing by creating an easy avenue — i.e. some sort of component or add-on to AdWords.

Combined with the iPhone’s effect on mobile local search innovation, and rising mobile search adoption (partly due to younger generations’ mobile affinities and their gradual buying empowerment over time), MoLo’s day will come. Soon.