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Rumor: Google Pulls GPhone Out of China

Caixin Media, 1/19/10

Google recently unilaterally called off plans to partner with China Unicom (NYSE: CHU; 0762.HK; 600050.SH) and mobile handset makers on its GPhone 3G handset, and has stopped holding its weekly "four-party communications meetings" as of last week.

A source close to Unicom's GPhone project revealed that an internal announcement at Unicom said Google would no longer license its logo or jointly developed application content. Google reportedly suggested that Unicom cancel the WCDMA Google Phone press conference, which had been slated for January 20. The source said that Motorola, which had been part of the GPhone plans, received a notice from Google on the same day, calling for it to return the large number of mobile phones that it had designed and manufactured for Unicom to the manufacturer for processing and removal of all Google-related elements. Samsung received a similar notification.

Google explicitly stated that the Google logo, the English words Google Phone, or the equivalent Chinese characters must not appear on the casings or in the brand names of phones produced under the project. The Google applications installed on the phones, including Google Search and Google Maps, are also to be deleted completely.

The source said that Motorola had already manufactured some 20,000 phones for the project at a production cost of RMB 3,500 per phone, and that Samsung had manufactured 10,000 units at RMB 3,000 apiece.

Google China has yet to issue any response to reports of its cancellation of the mobile phone partnerships, or any indication of the future direction of its four-party partnership. The source said that China Unicom's GPhone project has essentially run aground by this point, adding that it would be up to Google to decide whether or not the four-party meetings would resume this Wednesday.

Editor's Note: For more background on this topic, please see "China Unicom Delays Launch of Two Android Handsets" MD 1/15/10 issue.

Keywords: GPhone withdraw China Unicom handset Motorola wireless Android Google 3G 0762.HK 600050.SH CHU Samsung

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