Google's game-changer

Will the GooglePhone matter? Earlier this month, Google officially unveiled its long-rumoured mobile phone software. Dubbed "Android", the Linux-based software stack is being backed by more than 30 partners, including handset makers Motorola, Samsung, LG and HTC, and service providers Sprint Nextel, T-Mobile and NTT DoCoMo.

But no Nokia. No AT&T or Verizon. No Apple or Palm. No Symbian, Microsoft or RIM. Without them, will Android matter at all? Hold that thought.

The day after Google's Android announcement, the One Laptop Per Child Foundation said that its low-cost, Linux-based laptops for kids were finally rolling off the assembly line in China. The little green XO laptops, with their built-in mesh networking and lowpower- consumption design, will start shipping to Uruguay and Mongolia shortly. Two years ago, when MIT's Nicholas Negroponte first started showing prototypes of the XO, nobody in the IT business took it seriously.

It was too small for adults to use comfortably, too toy-like in appearance, too underpowered to run commercial software. And it was being developed by academics who had never designed a real product, much less sold a single unit. There's just no market for it, the bigwigs said.

Intel boss, Craig Barrett, went out of his way to sneer at the XO, calling it "the $US100 gadget". Of course, Intel rival, AMD, was supplying the CPUs for the XO. And Intel had its own low-end laptop, the Classmate PC, which it was trying to sell to foreign governments to distribute to students - without much success.

Two years later, the XO's price has ballooned to almost $US200. And Negroponte, who circled the globe talking up the XO and getting handshake agreements from governments, has discovered that doesn't often translate into an actual purchase.

But those two years have raised the concept of low-end laptops from an academic fantasy to a marketplace reality. Today, Intel is selling Classmate PCs by the thousands at about $US300 each (its biggest deal is 700,000 in Pakistan), has joined Negroponte's foundation and may use some of the XO's technology in its own products.

Meanwhile, Asustek is now selling an XO-like laptop called the Eee PC for about $US250 to consumers. And in the US, Wal-Mart has been selling Acer laptops for under $350.

And starting last week, US and Canadian consumers can even get an XO - as long as they're willing to pay $US399, so a second XO can be shipped to a third-world student.

But before XO has even shipped, it's already a game-changer. That nonexistent market for a low-end laptop for kids? Now it exists.

Funny how competition will do that. Which brings us back to Google's Android.

Let's face it: Google has about as much experience making mobile phones as Negroponte had making laptops in 2005. Sure, Google has money to burn, and it has lined up partnerships with major players in the mobile business - but not the top players. Can Android still make a difference? Sure. Android doesn't even have to win. It just has to be in the game.

What does Android promise? Lots of third party applications and better Web browsing, mainly. That's what Nokia, Apple, Symbian, AT&T and the rest will be scrambling to match in the year before Android-based phones hit the market. So those new capabilities will be out there anyway. And since Google makes its money from ads on Web pages, the 800-pound gorilla of dot-coms wins even if Android loses.

The rest of us? We get Android's benefits either way, too - easier development, more usable Web apps, the things that can make smartphones better business tools. All because Google isn't afraid to compete.

And there's nothing the matter with that at all.