• Business Week, Thursday, September 6, 2007 10:45 AM

Is the gPhone a phone, an operating system, or a series of apps? Unnamed sources said that gPhone is really an operating system, developed by the personnel Google acquired when it bought Android in 2005. But its platform and services are cheap enough to enable smartphones to sell at lower prices -- like $100, according to the report.

Handset makers (unnamed of course) are hard at work on prototypes of lower-cost phones based on the gPhone platform, which features Web browsing, services like mobile search, Google Maps, Google Earth and other multimedia applications. Of course, the trade-off for the cheaper phone will be ads targeted on every Google application in the OS. Google isn't just out to introduce a new platform; it wants to reform the business model of the entire mobile wireless industry--an industry dominated by Microsoft and Yahoo.

The company didn't comment on the information, but it made no denials, either. It all makes sense: Google recently announced its intention to bid on wireless spectrum, to either build its own network or partner with someone else to build it. The media services giant is beefing up its mobile applications by the day--and its personnel. According to the report, Google has 67 job openings on its site for mobile-related positions. It also recently filed for a patent on a mobile payment system that would let people pay for products via SMS.

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