Google has temporarily quashed rumours of a Google mobile handset by announcing instead a new mobile operating system called Android - and declaring it far more important than mere hardware.

"Today's announcement is more ambitious than any single 'Google Phone' that the press has been speculating about over the past few weeks. Our vision is that the powerful platform we're unveiling will power thousands of different phone models," says Google CEO, Eric Schmidt.

The search giant is attempting to capture a share of the mobile phone sector, which is estimated to now be at 3 billion users. If a large enough user base could be achieved, then advertising and improved placement of Google services could bring in considerable revenue to the company.

Android, which is based on the Linux platform, will be made freely available under an open licence. This will allow manufacturers to modify the software to suit their needs, and should help encourage adoption.

Google says the platform will also allow developers to market new programs for
mobile devices faster and easier. Previously, the company claims, there was a lack of collaboration in the sector, which "made it a challenge for developers, wireless operators and handset manufacturers to respond as quickly as possible to the ever-changing needs of savvy mobile consumers."

Thirty-four companies have formed a group called the Open Handset Alliance, which aims to lower the cost of creating mobile applications and devices by using the OS. Nvidia, Intel, Texas Instruments, Motorola, Samsung, LG and HTC are all members of the OHA.

An early access software development kit will be released next week to allow developers to start creating third party applications, and products using Android are expected to be ready for release in 2008.

It is still unclear at this time whether Google are working on a hardware handset as well, as rumours have suggested since 2005.

You can see an introduction to the new OS in a Google video.
(http://www.youtube.com/watch?v=U6x0zZsqI3s%20)

In 2005, Google acquired a mobile software company called Android, but it's not yet known exactly how much of the new OS code is a result of this.