Will Google Phone’s September Launch Kill Nokia?

So a telecoms consultant gossiped with us at the weekend and said that Google is planning to launch its phone in September. It will be much like the iPhone in appearance and tactile functionality but will be loaded with Google apps. Kinda makes sense. Google are working with the standard set of hardware makers – except they have excluded Nokia from the deal.

Whether you believe this news or you don’t, it does paint an interesting picture about the future of the mobile space. It suggests that the mobile market will be dominated by just three players – Apple, Google and Nokia.

It’s an interesting change of power – two software makers have usurped the market, positioning traditional handset makers as suppliers and neutering the power of the network providers.

Apple has rewritten the rules for the handset market and for the handset makers, the problem is that there’s a growing feeling that owning a non-Apple phone is like owning an MP3 player that’s not an iPod – either a determined decision or (probably more likely) a cheap and cheerful option.

Elsewhere, Google is making moves to quell the network providers, Google recently made a very determined move to create advantage: As we understand it, Google recently bid at the wireless auction for the 700MHZ spectrum not to try to get the license but to push the bidding past a figure of $4.6m where the FFC would insist that the winner (Verizon) offers an open-access platform. The $4.6m barrier was set to mainly allow open-access for emergency services, but it’s not hard to see how a major (and modern) software player might take advantage of a scenario where the network provider can’t control what handsets or applications are used over their network.

If Google does launch its phone, then Nokia would become an anomaly. As Apple and Google compete by offering and updating better and better applications that work with a phone user’s off-mobile web experience, Nokia will still be set in the handset market despite application innovation. Apple and Google are creating ‘cloud’ software that wraps around us for every digital connection – mobile, PC, TV or other. Nokia can’t work in the cloud – and partners like Microsoft are so far behind when it comes to modern web software it would be very difficult to catch up without a market-changing moment of innovation.

One way to sum up the possible situation would be to compare Apple, Google and Nokia’s mobile business at the end of this year to the old photocopier marker: Nokia will be trying to make money from selling the machines while Google will be making money from selling the copier paper (with Apple somewhere in-between).

Thoughts?