Google has a happy knack of turning a problem into an opportunity. The search giant may be at it again.

As well as surfing the web on personal computers, more and more people are accessing the internet on their mobile phones. Google does not shy away from the fact that serious money can be made thanks to this new trend. If more people access the internet, more will use Google and click on its advertising, which makes the company billions of dollars.

There was one big glitch, however. Accessing the web from a phone used to be an exercise in frustration. It was slow and web pages appeared garbled. A phone was not cut out to do simple tasks such as view pictures or play videos.

Google decided to create a better operating system for mobile phones, just as Microsoft’s Windows helps a user to operate a PC. Unlike Windows, however, Google’s software for mobiles, called Android, would be free and “open source”.

The open source concept has been used in other technological advances ranging from web browsers, such as Mozilla’s Firefox, to operating systems, such as Linux. It means that programmers and developers can have access to the code behind the software, essentially its DNA.

With Android, developers are free to edit, adapt and improve this software as they wish. They can fix any bugs with the software and develop new features — everything from mapping services to new games. The makers of handsets can then install it free. Google makes money through encouraging more people to surf the web. It describes this as a win-win situation for everyone.

Google hopes that opening up Android to anyone who wants to work on it will speed up innovation of the product. A spokesman explained recently to a group of developers: “There will always be smarter people outside Google than inside.”

Google provides the platform and relies on others to build on top of it. “Starting from open source means we have not had to repeat work,” says Chris DiBona, the open source manager. “Instead, we can concentrate on what we are best at.”

This is a radically different approach from Apple, which makes the iPhone, widely regarded as the best smartphone on the market. Like Microsoft, Apple sticks to a closed proprietary system, where the company’s engineers and developers, shrouded in secrecy, create a product such as the iPhone or iPod with little input from the outside world.

The open source concept works only if there is a dedicated band of developers, who create interesting new features for Android and also do the dirty work such as fixing any glitches in the software. Unlike the employees of Apple or Microsoft, they are not always paid for their trouble.

Can this work? It has already been done at Mozilla, a not for profit foundation, which makes Firefox, a web browser that is the biggest rival to Microsoft’s Internet Explorer. Industry figures show that about 20 per cent of internet users choose Firefox, whereas about 70 per cent use Explorer. However, some analysts regard Firefox as a superior product and its market share has been rising consistently.

Mozilla stays on the cutting edge because it can rely on an enthusiastic base of developers who keep Firefox fresh and new. While Mozilla has about 200 people on its payroll, including 100 full-time developers, close to 1,000 helped to create the latest version of its browser Firefox 3.

“We are not a big enough foundation to operate offices in 60 countries but we have our browser in more than 60 languages,” says Mike Shaver, vice-president of engineering at Mozilla.

The translation work is done by people around the world on their own initiative. Mozilla engenders passion in its users by being a public benefit organisation, Shaver adds.

Google needs to replicate this passion in its developer base for its open source project to succeed. Like Mozilla, it is trying to do this by creating a transparent system.

But Google is not shy of providing clever cash incentives as well. Before Android was launched, Google had a “development contest” to create features for the new system. Almost 2,000 people entered the first round, with a prize fund of $10 million (£6.8 million) shared between the creators of the best applications.

The first phone to run on Android, the T-Mobile G1, appeared on the shelves in October. Twenty-five thousand British customers pre-ordered it. The Android marketplace, where people download new applications, already boasts a few hundred programs from which users can choose.