NOT content with dominating the Internet, Google is believed to be targeting the mobile communications market next.

Lehman Brothers analyst Douglas Amnmuth believes Google will launch a mobile phone in February next year, according to a report in The Independent on Sunday.

Similar to Apple's iPhone, which was launched in June, the phone will have a big screen with touch display and WiFi capability. However, it is expected to sell at a lower price than the US$400 (S$586) iPhone.

Mr Anmuth said Google's 'plain vanilla' smartphone is likely to be manufactured for between US$120 and US$160, with a price point below US$100. It could potentially even be free, the paper said citing Mr Anmuth.

The incentive in offering a free phone lies in the online advertising revenue Google could generate with an Internet-enabled mobile device.

It is probable that Google will also, like Apple, adopt a revenue-sharing model with mobile carriers, with Orange being its most likely partner in Europe, and Sprint and T-Mobile in the United States, Lehman Brothers said in the report.

They also said Google is building a Linux-based mobile operating system likely to include Google applications like search, maps, Gmail, Google Talk and Calender. But not all agree that Google will be rolling out its own mobile phone handsets. US-based investment bank Piper Jaffray believes there is greater likelihood that Google will develop a mobile operating system than manufacture phone hardware, according to the report.

It feels Google's mobile phone operating system, which will take on Microsoft's Windows Mobile system, could be unveiled before the end of the month, the report said.

Google's acquisitions have pointed in the direction of a mobile phone strategy. It acquired Android, a software development company specialising in mobile operating systems that indicate the position of the user, in 2005.

Google's share price last week broke through the US$600 mark and seems poised to rise higher with strong third-quarter results due on Thursday and its potential to enter new, revenue-generating markets.