After a long period of rumour and speculation, Google has announced its plans to enter the cell phone industry. It will partner with 33 cell phone manufacturers to make "Android", a Google-based cell phone operating system. The alliance of cell phone companies, The Open Handset Alliance, will work together to develop "open source" cell phone software to improve the way cell phones can get on the internet and increase what a cell phone can accomplish online.

This announcement follows an earlier report that Google was demostrating a prototype of a cell phone that would bundle Google services with advertisements for a low or no-cost cell phone. While Google has said it has no immediate plans to get into the hardware end of cell phones, it hasn't ruled out such a move. This has fueled rumours of a "gPhone" supported by advertisements.

Such speculation has brought with it privacy concerns. Google does extensive data mining on its users to target advertisements at them. When it acquired DoubleClick, it became one of the largest repositories of consumer marketing information on the planet. Google has prided itself and made its bread and butter by targetting advertisements effectively to consumers. It is first and foremost a marketing company.

With the entrance of Google into the cell phone market, this is likely to continue. There are already attempts to offer cell phone service at reduced or no cost as long as a consumer is willing to put up with ads. Some of these services "listen" to your phone calls to determine what kind of products you are interested in. In Asia and Europe, cell phone providers are using the cell phone's location to determine which ads should be sent. Other companies, such as Vodafone, use Bluetooth to send advertisements to any phone within the relatively short range of a transmitter. What this adds up to is another avenue with which to advertise to consumers.

Privacy concerns

Cell phone companies already have a rudimentary way of tracking the locations of their users. With location-based advertising, they have an incentive to not only track their users, but to store such information. With a "Google phone", it is likely that a treasure trove of marketing information could be harvested from the device to offer services to consumers. According to the Open Handset Alliance website: "With Android, a developer could build an application that enables users to view the location of their friends and be alerted when they are in the vicinity giving them a chance to connect." Such a feature could easily be misused in the wrong hands.

If users can choose whether or not they want such a system, that would be fine. If, however, Android or something similar becomes the norm, consumers will be faced with dilemma: either they can have a cell phone that makes available information they'd rather keep private or they can give away their cell phone. What happens when cell phone companies realize there is good money to be made in trafficking of marketing information? Will they be able to quietly rewrite their cell phone contracts so consumers unwittingly give up their privacy?

Lastly, all cell phones shipped in the United States are required by law to come with a GPS that can be tracked by law enforcement (in the context of someone calling 911 and not being able to relay their location in an emergency). However, these can be opened up for general use. Cell phone manufacturers could easily set the GPS to be open and not allow (or make very difficult) users to turn it off. Consumers may not be keen on the idea of being forced to carry a tracking device.

Spam gone wild

Modern life has become increasingly saturated with advertisements. Television shows, even those on cable, are at least 30 per cent commercials (not including those paid infomercials at odd hours). Sports stadiums are named after companies and littered with billboards. Public transportation is making up funding shortfalls by selling advertising. Even bathroom stalls aren't immune from advertisements. If consumers sign up to be bothered by advertisements to get a free cell phone, that's their prerogative. It says something about a society when it tolerates data mining phones in exchange for a cheaper phone bill but sputters indignantly at the idea of the government data mining those same phones to combat terrorism.

When cell phones become targets for advertisements, spam will become an even greater problem. Email made it possible to communicate cheaply with people all over the globe. Legitimate commerce over email made transactions cheaper and passed those savings on to the consumer. However, spam threatens to make email unusable. Over 90 per cent of all email is unsolicited spam. The author of this article receives approximately 2,000 emails a day, but over 1,800 are junk (most of which are Viagra or associated products). Luckily, my software catches most of this junk so it doesn't have to be dealt with manually. However, cell phones lack the processing power and capabilities of a server and would quickly be deluged by spam. It is also important to note that Google's AdWords system (their advertisement service) is known to have a significant amount of fraud associated with it. Likely, "gPhones" will also be used in similar "click fraud" schemes.

Hacking concerns

Until now, there has been no real activity in cell phone "viruses" or hacking. The main reason for that cell phones are not being used for commerce. Basically, there is no money in hacking cell phones. But when there is, hackers will attack in battalions. Preventing identity theft using home computers is hard enough, but technology simply hasn't been adequately developed to deal with it on a cell phone. Organized criminal groups will be able simply mimic legitimate advertisements and trick consumers into running software to take over their phone to be used in criminal enterprises.

Like all developments in technology, cell phone advertising can open up new economic models, spur commerce, and increase the quality of life. It can also threaten individuals and corporations. As development moves forward with Android and similar services, hopefully these corporations will take the necessary steps to protect consumers. But considering the less-than-stellar job they've done in the PC world, I wouldn't count on it.

John
Bambenek is a freelance columnist and blogger at Part-Time
Pundit. He also writes for several other popular websites such as BC Magazine and the Internet Storm Center.