HOWZAT

However, analysts have noted that low-margin, basic devices only deliver profits when made in huge volumes by companies with massive production capacities – things that Google lacks.

Google is under pressure to diversify from its hugely successful search-advertising technology that brings in the vast majority of its profits. However, speculation that Google was working on a basic PC has so far proved unfounded.

Instead, Google has sought to take on Microsoft in the software market, most conspicuously through a suite of paid-for software tools, including e-mail, a word processor and a spreadsheet, that compete with Microsoft's dominant Office products.

Today, Google announced partnerships with the Rwandan Government and the Kenya Education Network, under which free versions of the Google Apps services will be provided to government workers and students.

Microsoft has so far shrugged off suggestions that Google could pose a serious threat to Office, which together with the Windows operating system is responsible for the lion's share of its profits.

Over the weekend, Steve Ballmer, the Microsoft chief executive, criticised Google at a student event at Stanford University. “Google built one very good business," he said. "Everything else is sort of cute.”

Last week, Microsoft bought Tellme Networks, a specialist in speech-recognition, for an estimated $800 million. Microsoft will use the firm's technology to enhance its own moves into mobile search markets.

Mobile numbers

Nokia
36.2 per cent market share in the fourth quarter of 2006
Up from 35 per cent a year earlier, making good ground lost after failing to offer "clamshell" models
Sold 103 million phones in the period

Motorola
22 per cent market share in the fourth quarter
Up from 17.8 per cent a year earlier on popularity of Razr model and basic phones for emerging markets
Sold 61 million phones

Samsung
11.3 per cent market share in fourth quarter
Down from 12.1 per cent a year earlier, but has recently signed deal to include Google applications on its handsets
Sold 32 million phones

Sony Ericsson
9 per cent in fourth quarter
Up from 7 per cent a year earlier, boosted by popularity of Walkman and camera phones
Sold 26 million phones

LG
6.3 per cent in fourth quarter
Down from 7.2 per cent a year earlier after shortage of new models; hopes new Prada phone will reverse the slide
Sold 17 million phones

Source: Gartner

Unknown quantity
Apple iPhone
Targeting sales of 10 million in 2008

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