ARM, the British chipmaker, has unveiled the first mobile phone to use Google’s Android mobile operating system at the Mobile World Congress in Barcelona.

The unbranded prototype features an internet browser, map software, multimedia applications, text messaging, calendar functions and email as well as a phone.

Android is backed by an alliance of more than 30 mobile phone operators, handset makers, software firms and component manufacturers. It will be distributed free to phone makers, but users will have to put up with advertising messages during calls and browsing.

ARM’s prototype uses Google.com as its home page, Gmail as its email application, and Google Maps for navigation.

The early adopting companies believe that by developing phones that are easy to use as well as attractive to the eye, they will be able to challenge the Apple iPhone, currently the market leader in non-business smartphones.

Although the Android project is at a relatively early stage, the first Google-based mobile phones are expected to go on sale later this year. Strategy Analytics, a research firm, has estimated that Android will be installed on two per cent of smartphones by December.

Estimates of the mobile advertising market put it at more than $11 billion by 2011.

That Gmail storage counter seems to have been stuck around 2,800MB for quite a while. Many users have exceeded that some time ago, so it was appropriate that storage-rich Google announced new target numbers going forward.

The Official Google Blog says :

In April 2005, we started increasing Gmail storage as part of our “Infinity+1″ storage plan. At that time, we realized we’d never reach infinity, but we promised to keep giving Gmail users more space as we were able. That said, a few of you are using Gmail so much that you’re running out of space, so to make good on our promise, today we’re announcing we are speeding up our counter and giving out more free storage.

Thr new storage targets are given as :

2912MB by October 11, 2007 midnight Google time
4.2GB by the 23rd this month
6GB by January 4th next year
42GB by the year of 2038

Hmm, don’t know about 2038 but it’s good to see the company looking so far ahead.

Google today announced Apps Premier, its subscription package of premium, hosted business applications in direct competition with Microsoft.

For $50 (£26) a year per user, Google Apps Premier Edition will offer business customers a number of web-based applications including email, word processor and spreadsheet. It will compete with Microsoft Office’s desktop-based Word and Excel.

A Microsoft spokesman downplayed the launch, claiming online services such as Google’s are “not alone in altering today’s technology industry. Productivity applications represent a very competitive space in which more than 450 million users around the world have consistently chosen Microsoft.”

The Times (London) reports : “Microsoft’s Business Division, which includes Office, accounted for $3.5 billion of the group’s revenues of $12.5 billion in the latest reported quarter, making it the largest source of sales. However, industry insiders say that Google has been quietly preparing for months to tap Microsoft’s cash-cow. Keen to supplement its lucrative search business, Google has built massive data-storage plants, thought to be years ahead of those so far developed by Microsoft and IBM.”

This “cloud” is now being used to host both software and data, while the internet becomes ever more the operating system.

Tom Austin, of Gartner, the technology analysts, said: “This constitutes a real threat to Microsoft’s business model. Eventually, it will have to switch from limited-use licences to software as a service. That will require a fundamental reengineering.”

Despite investing heavily in Office 2007, which was released earlier this month and which, like its predecessors, is anchored firmly to the PC, Microsoft has earmarked $2 billion to develop its own data centres.

The company added that it is now partnering other businesses “to capitalise on emerging services, such as advertising-based software, subscription or on-demand software”.

Most of the Premier Edition components are already available free. “From today, for the first time, it will charge for “white label” tools that carry its customers’ brands, so that e-mail addresses can be in the name of the client company.”

The Wall Street Journal is reporting that Google is to test it’s long-awaited “Wallet” service, now renamed GBuy, an online payments service.

“Web-search giant Google Inc. is set to introduce a test version of its GBuy online-payment service as early as this week, according to people briefed on the situation. The service, which would challenge eBay Inc.’s PayPal online-payment service and others, has been expected for several months. To attract consumers, Google plans to offer an unspecified rebate to people who complete online purchases using GBuy, according to one person briefed on the company’s plans.”

The system will switch buyers from the normal checkout procedure into a GBuy channel if the merchant accepts the system and the buyer chooses the option. Searches on products will indicate which merchants accept payments through GBuy.

“The expected arrival of GBuy presages a shake-up in the online-payments market. Until now, consumers have only had payment options such as PayPal, which lets consumers pay using their credit card or a bank-account transfer without disclosing their account information to the merchant or individual receiving the payment. ”