Verizon Wireless, Google in Android partnership (Update)

Verizon Wireless, Google to hunker down on phones (AP)
Eric Schmidt, left, chairman and CEO of Google, and Lowell McAdam, president and CEO of Verizon Wireless, announce a partnership, Tuesday, Oct. 6, 2009, in New York. Verizon Wireless and Google Inc. said they are teaming up to speed development of new mobile devices based on Google's Android software that will run on Verizon's cell phone network. (AP Photo/Mark Lennihan)

(AP) -- Verizon Wireless and Google Inc. are teaming up to tackle the challenge posed by the iPhone, saying they will collaborate closely to create wireless devices that use Google's software.

Verizon Wireless, the largest cellular carrier in the U.S., had already said it would sell phones with Google's Android software. But it put a lot more weight behind that Tuesday, pledging to commit "substantial resources" to developing and selling Android phones.

The announcement reflects both companies' belief that they can't sit back and expect phone manufacturers and software developers to deliver a standout hit that can match the iPhone's popularity.

Google CEO Eric Schmidt said in an interview that the company couldn't just release its software and then wait for manufacturers to do "amazing things" with it.

"The way you really create a great product is you collaborate at the technical level. That was the pitch from Verizon, and we actually changed our strategy based on that," Schmidt told The Associated Press.

Verizon Wireless expects to launch two Android phones this year, with the first one arriving in a few weeks. It hasn't revealed which ones they would be, but an AP photographer captured Schmidt and Verizon Wireless CEO Lowell McAdam holding two Verizon-branded Android phones. One of them was an as-yet unannounced model from Motorola Inc., and the other looked like HTC Corp.'s Hero. That phone is already available from T-Mobile USA as the myTouch 3G, and will be launched by Sprint Nextel Corp. as well.

Other than that, the companies did not say what specific products would spring out of the collaboration.

The partnership adds to the momentum behind Android, which is seeing significant interest from carriers and manufacturers. Sales of the few existing Android phones have been small compared to the iPhone, but Google's increasing involvement in wireless led Schmidt to resign from Apple Inc.'s board two months ago. Federal regulators had been investigating whether his dual role made it easier for the technology trailblazers to collude in ways that would diminish competition.

Phone manufacturers can use and modify Android freely, and several have announced they're doing so, including Samsung Electronics Co., the largest provider of phones for the U.S. market. That means that if Android takes off, Verizon Wireless won't be dependent on one vendor to deliver its hit phones, like AT&T Inc. has become dependent on Apple and the iPhone to draw in high-paying customers.

Verizon Wireless isn't abandoning competing "smart" phone platforms such as Microsoft Corp.'s Windows Mobile, Palm Inc.'s webOS or Research in Motion Ltd.'s BlackBerry OS. But Verizon hasn't made a similar commitment to either of those.

While partnering on software, Verizon Wireless and Google are on opposite sides of a debate about regulation of the wireless industry, sparked by closer scrutiny from the new administration. Congress and the Federal Communications Commission have questioned handset exclusivity deals, and the fact that Apple hasn't allowed a particular Google application onto the iPhone.

"From Google's perspective, we understand the role of the regulators ... I think we understand why they're doing it and why it makes sense," Schmidt said.

McAdam said the government will have a tough time making appropriate decisions for a fast-moving, competitive industry like wireless.

"Regulators can take a snapshot of the environment and try to interpret that, but it's like trying to take a snapshot of a high-definition, full-motion video. It's moved on long before you can codify anything. I think it can stifle the development of the market if you're not careful," McAdam said.

Verizon Wireless is a joint venture of Verizon Communications Inc. of New York and Vodafone Group PLC of Britain.

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