There were a lot of rumors recently regarding Google’s entry into the cellular market or whether they are building a Gphone or an operating system. On Monday, Google confirmed its entry into the mobile market by saying that they are developing a free cellphone operating system that will enable them to show there ads and services to the people who are not in front of there PC.

The cellphone package will have the name “Android”, a startup which Google acquired in 2005. The phones which will be equipped with Google Software will not be available till the second half of 2008. However Google wont be making any cellphones. It will work with 4 mobile phone manufacturers who will use the Google software in there handsets. This will be a Major threat to other mobile operating systems by Microsoft Corp, Palm inc and Symbian which is by Nokia etc.

Since the OS is free, it could significantly reduce the cost of smart-phones as manufacturers wont have to pay for the OS. It will be based on codes that can be openly distributed among programmers thus enabling them to build new applications and enhancements. Motorola Inc, Samsung Inc, HTC and LG Electronics have so far agreed to use Google’s software in there phone. The pricing detail has not yet been revealed but the OS equipped phone is expected to cost less than the iPhone.