Polaris Venture Partners general partner Simeon Simeonov is the latest to suggest that Google is working on a mobile Phone. In his blog, Simeonov divulges that Andy Rubin (who founded Danger and later, Asteroid, which was ultimately sold to Google) is working with a team of about 100 people on a Google phone.   He also sites other Google acquisitions as evidence of a forthcoming Google Phone: mobile applications company, Reqwireless and Skia, who makes a portable graphics engine.

Simenov’s blog is definitely worth a read. It is not the only evidence that a “gPhone” (as I’ve now taken to calling it) is in the works.  Back in December, UK paper, The Observer, reported that Google was in talks with Orange:

[Google’s] plans centre on a branded Google phone, which would probably also carry Orange’s logo. The device would not be revolutionary: manufactured by HTC, a Taiwanese firm specialising in smart phones and Personal Data Assistants (PDAs), it might have a screen similar to a video iPod. But it would have built-in Google software which would dramatically improve on the slow and cumbersome experience of surfing the web from a mobile handset.

In the last year (plus), Google has proven that it wants to be a key player in mobile by innovating in the mobile applications marketplace and making key acquisitions (including Dodgeball, which Simeonov didn’t mention in his blog).  It is easy to see the business reasons why Google is making an investment in mobile.  The mobile marketplace presents an opportunity for Google to expand its search and advertising empire.  According to Ovum Ltd., mobile advertising will become a $1.26 billion market by 2009 (a big jump from the $45 million market it was in 2005). With the social media markets exploding and the lines between social media and targeted advertising becoming increasingly blury, I’m particularly interested in seeing what sort of social media featuers the gPhone incorporates. I’d love to see Google put out a mobile phone with built in GPS and suped-up Dodgeball built-in.  If that happens, it would likely shake-up the mobile industry by encouraging innovation and possibly spelling the death of comanies like Helio and Amp’d.

Even if as the Observer suggests, the gPhone hardware isn’t “revolutionary,” my hope is that the software will be extraordinary.  Having worked for 18 months as a full-time consultant on Palm Inc.‘s Business Development/ Developer Relations team, I can tell you that a phone (hardware) is only as good as the software that runs on it.  Palm’s Treo is popular in large part because of the 3rd party software applications available for the device.  Palm isn’t the only company that appreciates the value that software brings to mobile hardware.  Motorola and Nokia both have impressive 3rd party alliance programs (MotoDev and Forum Nokia).  If Google puts out a phone, I suspect that it’s strategic advantage will be in the availability of as yet, unreleased, proprietary social and productivity-related software.  I hope that that the gPhone comes fully loaded with social features that help advance the mobile ecosystem and that any on-phone advertising is both tasteful and non-invasive.