On Tuesday, Deutsche Telekom AG unveiled the first smart phone that will use Google’s new Android operating system. The device is called the G1, sold by Deutsche Telekom’s subsidiary T-Mobile, and it looks a lot like the iPhone and other competing smart phones (well, except for the Google logo on the back). But its the software, not the hardware, that T-Mobile and Google hope will set this new product apart. It will need to be special to crack the dominance of RIMM’s Blackberry and Apple’s iPhone in the smart phone market. Those two companies controlled a combined 65% of the market in 2008, ahead of a long list of competitors that also includes PALM, Motorola, LG, and Samsung.
Smart Phone Market Share as of May 2008
But smart phone users are savvy folks, and they’re looking for devices that will make life more efficient, and more enjoyable. That’s where the cache of Google’s brand name comes in. But will Android work as promised? And, importantly, what effect will this new product have on the earnings (and stock prices) of Google, Deutsche Telekom, and the other companies involved in the cell phone industry?
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