As Brian White wrote earlier, Google Inc. (NASDAQ:GOOG) officially claimed it is not entering the direct cell phone business. It's a smart decision for Google. It is not used to being the secondary player in any business it engages in. Possible partnerships with carriers is a more sensible route if Google does enter the phone business. Google is an online company, providing online service, and not a physical company with hard, touch and feel products.

Apple Inc. (NASDAQ:AAPL), on the other hand, is a touch and feel company and would be an extremely formidable foe if Google decided to go "hard-line." Apple has two major advantages and will exploit them to the max: the iPod and the Mac as well as the retail store outlets.

The cell phone business is a retail, physical, touch and feel business. Consumers want to hold that phone and play with a phone's features before buying a certain model. The iPhone will be a mega success due to the retail store system that Apple has brilliantly developed. With 173 stores in strategic locations around the world, Apple will pick all the low-hanging fruit with the iPhone in the first quarter it is available. Google's business model has not encountered any physical products and this could prove to be uncharted waters for it.

Setting up carrier relationships using Google technology may be a wise business decision, but at the end of the day, the customer still wants to test that phone before buying.

It's Apple's game to control and win...

Georges Yared is the author of "Stop Losing Money Today" and "Baby Boomer Investing". Please visit www.georgesyared.com

Looks like Google Inc. (NASDAQ:GOOG) may not be producing the rumored Google-branded mobile phone after all -- even after a European Google exec recently hinted at the search giant's plans to enter the mobile phone hardware (and software) business.

Our friends over at Engadget just posted on this, quoting a Google exec from Southeast Asia who concludes that the company may get into the mobile handset business someday soon -- but on the software side of things. This makes sense, since the mobile phone handset market is already so crowded from the low end to the bleeding edge that it would make very little sense for Google to enter a hardware market where such a large investment may never fully pay itself back.

On the software side of things, however, Google's trademarked simplicity would probably be sought after by mobile phone users everywhere, which is why many Apple Inc. (NASDAQ:AAPL) fanatics and normal, everyday cellphone users are probably waiting on pins and needles for the new Apple iPhone to be released. If Apple holds true to form, the new iPhone will be one of the easiest handsets ever to use in terms of user interface. Can Google be far behind?

It seems that with all the hype surrounding Apple Inc.'s (NASDAQ:AAPL) rumored, then confirmed, iPhone, that rumors about a possible Google Inc. (NASDAQ:GOOG) mobile phone remained somewhat in the shadows. A few tech blogs picked up a story back in December about an Orange and Google partnership, but other than that, not much was written about the subject.

In January, some pictures of the Google Switch were released, but they looked fake enough to be discounted. Still, speculation that Google has been working on its own hardware has been growing. Then, yesterday, Engadget posted about a supposed marketing survey about the Google Phone. Again, the reliability of this is in question. From this alleged survey (larger view): "The Google Phone, designed by Samsung, is a very thin and stylish handset with a large screen and a QWERTY keypad so that it provides a real internet experience."

Over at Engadget they're wondering if Apple's iPhone could get some real competition. Not only does the Google Phone have all of Google's services for PCs, it includes 3G data, WiFi, and a two-megapixel camera, among other features. Last, but definitely not least, it might be a lot cheaper than the iPhone -- with a "flat-rate data service and a three-month trial."

If you recall, CEO Eric Schmidt said that "your mobile phone should be free," and I'd assume he plans, like all other Google services, to make money off advertising. The question is, would you rather pay $499 for the iPhone and get an ad-free experience, or would you rather be inundated with ads but pay much less?

If any of the rumors are indeed true, I guess we'll have to wait and see what consumers prefer.