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Google's still-nascent efforts to dominate the mobile market, already reeling from Apple's surging iPhone platform, were dealt another blow on Thursday when Intel and Novell announced that they will collaborate to promote Intel's Moblin operating system, a rival Linux distribution for mobile devices.

Whereas Google is initially targeting smartphones with Android (though an Android-based Netbook has apparently been released), Intel is targeting Moblin at Netbooks.

Additionally, Android and Moblin aren't simply two different Linux distributions, in the way that Red Hat Enterprise Linux and SUSE Linux Enterprise Server are. Android and Moblin use Linux in different ways, as Dirk Hohndel, Intel's chief Linux and open source technologist, suggested to me:

Moblin is Linux for mobile devices, (and its) first focus is on Netbooks. Android is an (operating system) for phones that uses a Linux kernel...very different.

Novell's Justin Steinman, vice president of solution and product marketing, said in a follow-up conversation:

Moblin 2.0 is the first open-source Linux software stack and technology framework designed from the ground up for the Netbook device type. Essentially, Moblin plans to start at the Netbook layer of the stack, and then work its way down to the smaller mobile devices. Given Novell's strength in delivering desktops based on Linux, it made sense for us to collaborate closely with Intel to deliver the optimal user experience on Netbooks.

Given Apple's rising dominance in smartphones and Symbian's lingering power in other mobile devices, this seems like a smart, strategic move. The Netbook market is still wide open, with Apple currently disdaining to enter it and Microsoft bleeding cash to hold its ground against Linux.

Though Ubuntu made the first forays for Linux in the Netbook market, could it be Novell and Intel that end up dominating it?

Maybe. Maybe not. The one sure thing, at least for now, is that Microsoft may win the short-term Netbook war, but it still needs a long-term, winning game plan for mobile.

The mobile market is fascinating because it is uprooting long-held beliefs about how and where to compete in software. Intel, Google, and Apple, each fiercely contending for dominance, share a common strategy: they're investing in the operating system but planning to make their money elsewhere (Atom chips, in Intel's case; advertising and revenue-sharing with application vendors, in Google's; hardware and revenue-sharing with application vendors, in Apple's).

Such strategies stand in stark contrast to Microsoft, which persists in trying to monetize its mobile Windows platform.

Small wonder, then, that Microsoft is losing the mobile battle. It's fighting with the wrong ammunition.

Back to Google. While it seems clear that Intel's Moblin initiative is an attempt to fend off Google's looming Android threat, there's probably enough time for Intel and Novell to stake out a strong position in Netbooks that Google will struggle to overcome.

Regardless, the one player left out in the cold in all this activity is Microsoft. Google, Novell, Intel, and Apple are each putting hefty resources into winning the mobile market, but doing so in a way that undermines Microsoft's traditional approach of licensing only the software. Microsoft's Xbox experience suggests that it can do hardware right, but will it be able to catch up if it starts chasing its competition?

Follow me on Twitter @mjasay.

Marguerite Reardon co-wrote this article.

There will be plenty of hullabaloo on Tuesday when T-Mobile unveils the first phone powered by Google's Android operating system. But the event is only the beginning of a long effort to rewrite the rules of the mobile communications industry.

The phone, a somewhat chunky model called Dream built by HTC, is expected to cost about $200 from T-Mobile and go on sale in October. Until other partners in the Google-spawned, 34-member Open Handset Alliance bring their Android products to market, this small piece of electronics will shoulder a lot of ambitions.

For T-Mobile, an Android phone could bring some Google buzz to the scrappy carrier, helping match what AT&T got from Apple's iPhone. It also could potentially persuade customers T-Mobile's new 3G network is worth paying give T-Mobile new revenue from online application sales.

For Google, Android is a tool to spread Internet-savvy phones far and wide. People with powerful networked phones use the Internet much more, and Google wants to be the top company supplying the information they demand online.

"Look at Japan, (where) we have far more usage of mobile Web. It's similar with the iPhone," said Google co-founder Sergey Brin in a meeting with reporters last week. "If the Internet is widely available, that's good for us."

What's not yet clear is how well Android phones will fare in the marketplace. Google's software is untested, and there are plenty of competitors in the mobile phone market.

But Google's advertising business is a money factory, and the company has shown it has patience to invest that money in key projects. So even if the first-generation Android phones don't entice people to line up around the block, competitors who develop mainstream phone operating systems such as Nokia's Symbian and Microsoft's Windows Mobile doubtless are taking heed.

New rules
Android is an attempt to bring some of the ways of the computing industry to the mobile phone world.

For example, taking a page from Microsoft's playbook, Google is trying to enlist countless programmers in its Android charge, relying on them to build applications for the phone. While the mobile phone business hasn't made it easy to add new applications to phones, Google wants to reverse this and bring more of the openness of PCs to the phone market.

"If you're going to be an Open Handset Alliance carrier, you can't lock it down," said John Bruggeman, chief marketing officer at Wind River Systems, a Google ally that helps phone makers build and customize Android for their phone hardware.

Open-source software is another example. The Android software, millions of lines of code that will become open-source software with the release of the first phone, employs some components familiar to the computing industry and some new ones. It employs Linux at its lowest levels to communicate with hardware, but applications running on the system are written in the Java programming language. Java is common in mobile phones, but Google diverged from the mainstream phone industry by creating its own Java foundation, called Dalvik, for running the programs.

Because much of Android is open-source software, it can be used for free, and that means those selling phones can spend their money on better hardware rather than on software license fees, Bruggeman said. In addition, other individual programmers or interested companies can help improve that open-source software, so at least theoretically Android could become an exercise in collective engineering the way Linux has been.

Wind River is contributing code of its own as part of its Android support business. Its customers' second-generation Android phones will ship in the first half of 2009, Bruggeman said, and "There's a good chance we'll make first quarter." He called the Dream a good start, but promised better power management, performance, usability, and features for the sequels.

Running the gamut
Android can be used by any phone manufacturer to build any kind of mobile phone--anything from a simple, inexpensive phone for the developing world to a power user's high-end smartphone.

Andy Rubin, head of Google's Android project.

(Credit: Stephen Shankland/CNET News.com)

HTC and T-Mobile seem to have gone the smartphone route in developing the Dream, which some are calling G1. So far, neither T-Mobile nor HTC has revealed details about the new phone. But rumored specifications for the device and pictures on various blogs suggest it's chock-full of bells and whistles to help it compete in the smartphone market against devices like Apple's iPhone and Research in Motion's BlackBerry devices.

Some of the features that are rumored to be included are a full QWERTY keyboard, 3G support as well as Wi-Fi, a full HTML browser, embedded GPS, easy access to Google applications such as maps, YouTube, instant messaging, e-mail, SMS texting, a 3-megapixel camera, a music player, video recorder and player, and a memory card slot.

The Dream's $200 price tag also hits the smartphone sweet spot for cost. T-Mobile is already selling both the BlackBerry 8820 and BlackBerry Curve for $199 with a two-year contract. And Apple and AT&T are offering the iPhone 3G for $200 with a two-year contract.

T-Mobile already has a decent portfolio of smartphones, including the BlackBerry Pearl, BlackBerry Curve, and BlackBerry 8820. It also sells two other HTC smartphones that use Microsoft Windows Mobile operating system, the T-Mobile Dash and T-Mobile Wing. But as the carrier rolls out its new 3G network, it needs a flagship device that will give consumers, who might be tempted to buy an iPhone for AT&T's network, a reason to buy a phone on T-Mobile's network.

High hopes
But the big question is whether the Dream can live up to expectations.

The iPhone set the bar for what customers should expect from a smartphone. Apple then raised the bar this summer with the iPhone 3G and a new App Store that allows people to buy and download thousands of applications.

Since the iPhone was first launched in 2007 exclusively on AT&T's network, wireless operators have been scrambling to find a cool device to compete. Last year, Verizon Wireless introduced the LG Voyager, which has a touch screen that flips up to expose a QWERTY keypad. Earlier this year, in anticipation of an iPhone with 3G, Verizon launched the LG Dare, a 3G touch-screen phone with a mobile browser.

In June, just a few weeks before the iPhone 3G went on sale, Sprint Nextel launched the Samsung Instinct, a touch-screen 3G smartphone designed to give iPhone a run for its money.

The HTC Dream is T-Mobile's iPhone slayer, or so the company hopes. Because the software has been developed by glamorous Google there are a lot of expectations. And some believe that Android could also be a game-changer, just like the iPhone before it.

Like Apple, Google plans a central site to distribute and sell applications. In August, it announced plans for the Android Market, an online center where people can find, buy, download, and rate applications and other content for Android phones. Initially, the site will only support distribution for free applications. An update later will handle different versions of applications, support different profiles of Android phones, and include analytics to help developers track adoption, Google has said.

Bruggeman, though, doesn't see Google's crosshairs painted on Apple's back.

"I don't think it's an iPhone killer. As long as Apple continues to innovate and create a good user experiences and sexy devices, there's always a place for that," Bruggeman said. "If the mobile phone market is 3 billion units and Apple has 15 million, they are a pimple on the mobile phone landscape. There will always be a room for a pimple on the landscape. Google is playing for the rest of the enchilada."

This post was co-written by staff writer Marguerite Reardon.