China says no limits on use of Google's Android

[January 27, 2010]  BEIJING (AP) -- China tried Wednesday to assure mobile phone companies using Google's Android operating system that they won't be hurt by a dispute over Web censorship, saying the technology will be allowed if it complies with regulations.

Google Inc. postponed the launch of its own smart phone in China following its Jan. 12 announcement that it will no longer censor search results. Others also are developing Android-based phones and could be hurt if Beijing tries to penalize Google by barring its use.

"As long as it fulfills Chinese laws and regulations and has good communication with telecom operators, I think its application should not have restrictions," said Zhu Hongren, a spokeman for the Ministry of Industry and Information Technology, at a regular news briefing when asked whether Beijing would permit use of Android.

The comments reflect the conflicting pressures on the communist government, which insists on controlling information but needs foreign companies like Google to help achieve its goal of making China a technology leader.

The operating system is one of a mobile phone's most basic elements and changing it after products already have been launched would be costly, said Ted Dean, managing director of BDA China Ltd., a Beijing research firm.

"There's a pretty significant upfront investment in developing a phone on one operating system," Dean said. "So you don't want to change course on so basic a system as what operating system it works on."

In a fresh blast of invective, the Communist Party newspaper People's Daily accused Google on Wednesday of being a tool of Washington's "Internet hegemony."

After seeing its strength eroded by the global crisis, Washington "is shifting its strategic focus from the military to the Internet," the newspaper said. "It is against this backdrop that Google becomes a tool of the country's Internet hegemony."

Google is in sensitive talks with the government, trying to keep an important Beijing development center, a lucrative advertising sales team and access to China's booming market for its fledgling mobile phone business.

A Google spokesman, Jessica Powell, declined Wednesday to comment on the status of talks or confirm whether top managers from the company's Mountain View, California, headquarters were in Beijing.

Zhu gave no indication of the possible fate of Google's own phone, planned with local carrier China Unicom Ltd.

China is the world's most populous mobile phone market and any restrictions on Google might hamper its effort to expand into mobile. The country has more than 700 million accounts and strong demand for advanced services.

State-owned China Mobile Ltd., the world's biggest phone company by subscribers, is developing its own smart phone, the OPhone, which uses a system that has Android as its foundation.

The involvement of such a major state company, a key player in Beijing's technology development plans, could add to pressure on authorities to contain the commercial consequences of the Google dispute.

Dell Inc., Motorola Inc. and Samsung Electronics Corp. also plan to sell Android-based phones in China.

Google allows use of Android for free, which might boost costs for manufacturers and phone carriers if they switch systems, Dean said.

Microsoft Inc., Nokia Corp. and others charge royalties for their mobile operating systems.

"It's a significant enough share of the price of a phone that it changes the economies of the smart phone business if you're paying someone else for the operating system," Dean said.

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On the Net:

Chinese Ministry of Industry and Information Technology (in Chinese): http://www.miit.gov.cn/

[Associated Press; By JOE McDONALD]

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