Holiday deadline for Google’s dream phone nears

By Scott Moritz

Google and its phone manufacturing partner HTC may have trouble breathing life into Android by the holiday shopping season.

The tech duo is working on the hotly anticipated mobile software for T-Mobile’s so-called Dream phone. But time is running out since the device will need clearance from the U.S. Federal Communications Commission, a process that typically takes three months.

Last year, Google (GOOG) made a big splash announcing it was setting its sights on the wireless market by the middle of this year. The search giant still hopes to make good on that promise, but all the pieces aren’t exactly falling in line.

T-Mobile the U.S. unit of Deutsche Telekom (DT) and No.4 wireless service says it is “working towards delivering an Android-based phone in the fourth quarter of 2008,” according to a statement provided to CNN. The phone would be the first to be powered by the Google-sponsored rival to the Apple (AAPL) iPhone, and if successful could land before the all-important holiday buying season.

But the Android project has met major challenges as Google leaves its comfort zone in an effort to push its software on to smartphones.

“To do it by Christmas is extremely tight,” says Roger Entner of market research shop Nielsen IAG. “They have to announce in the next two weeks with the FCC, and I’m not confident they will do it,” says Entner.

Google spokeswoman Erin Fors declined to comment on the timing of the first Android phone. “We are currently focused on delivering the next version of the [software developers kit] which should remove the remaining obstacles to broader developer adoption,” she said. “We look forward to continued dialogue with developers but have nothing to announce at this time.”

With 3 billion wireless phones in use, Google saw a big opportunity to extend its search and advertising success beyond the desktop to the mobile Internet community. Not willing to wait for telcos to adapt their phones to a Google-friendly setup, the company financed Android to develop a software system that would run cell phones and be open to all sorts of mobile applications.

The Android applications under development center largely on interaction between Google maps and a GPS-powered location based service. For example Social Monster combines an event coordination service like Evite with social network message blast like Twitter. Or WikiTude, an application that provides Wikipedia information about the area you happen to be traveling in.

All fun and useful, to be sure, but meaningless without a clear path to the consumer. A big disadvantage with Android is that its starting an operating system from scratch with brand new hardware that requires commitments from phone makers and a whole bunch of customizations to make the telco happy, say some observers.

Giving Android application developers reason to defect, Apple in March launched its own Android-type effort – the $100 million iFund with venture capital powerhouse Kleiner Perkins Caufield & Byers.