Google insists its Android phone is still on track

Google has denied that its much-touted mobile phone system, the gPhone, is facing delays and would be unlikely to hit the streets before Christmas.

After reports that handsets running Android, the Google system's official name, would not be on sale before the end of the year at the earliest, the company said yesterday that developments are on track and the first phones will be for sale in the second half of the year as planned. "We are on schedule and we're very excited to see the momentum continuing to build behind the Android platform among carriers, manufacturers, developers and consumers," a spokeswoman said.

Android is not a phone in itself, it is a software platform, based on the Linux operating system, which has been developed by Google as a competitor to Symbian and Microsoft on existing smart phones. In November, the search giant announced the establishment of the Open Handset Alliance, a 30-strong group of technology companies, handset makers and network operators who are interested in developing Android-based products and services.

The advantage for the mobile phone companies is that, because Android is developed using "open source" software – where the code is free to view, use and re-use – the potential for developing features is limitless, compared with traditional, proprietary platforms.

Eric Schmidt, Google's chairman and chief executive, said at the launch of the Alliance: "Today's announcement is more ambitious than any single 'Google Phone'. Our vision is that the powerful platform we're unveiling will power thousands of different phone models." The advantage for Google is that it can expand its internet presence into the mobile world. While the group's search, mail and mapping services are all available using any internet-enabled smart phone, Android will be designed specifically with them in mind. If the devices prove popular, Google will benefit from a vast extension of its advertising reach into the growing mobile internet market – sales of smart phones grew nearly 30 per cent in the last year, according to figures from Gartner, an analyst.

The most immediate benefit to consumers is likely to be the price. Because Android is open source, it can, in theory at least, be sold much cheaper than its proprietary competitors. At the moment, smart phones cost £200 to £600, but with Android, they could come down as low as £120, according to Carolina Milanesi, a research director at Gartner. "The great advantage of Linux is that it is cheaper than the other mobile operating systems, because you don't have to pay a licence fee, so it could drive more mass-market adoption of smart phones because it could bring to market more mid-tier devices," she said.

Much of Google's early work has been completed and a prototype version of an Android phone was showcased at the Mobile World Congress in February. But before any Android handsets can go on sale, the manufacturers and the network operators have major configuration work to build it into their systems. The success of the iPhone may have distracted suppliers by forcing quick development and marketing of rival handsets, particularly models replicating the touch screen interface.

"There may be a reaction in the market that has led some vendors to put Android on the back burner while they respond to the much stronger hype around the iPhone, which offers greater short-term benefits for them," Ms Milanesi said. "HDC have brought out the Touch Diamond, for example, and Samsung has been very busy coming up with the Omnia."