Analyst: Google Working with Apple In Phone Market

Despite talk that Google is developing its own mobile phone, Piper Jaffray analyst Gene Munster feels that the search giant is working with Apple, not against it, in the mobile phone space. Speculation that Google hired several employees away from Sidekick to work on a mobile phone may also be misguided.

"We spoke with one person with knowledge of the situation, and believe the SideKick hires were 5 to 10 people, with a focus on software," Mr. Munster said. "We believe Google is building mobile applications for search and location that will work with the iPhone, and other mobile phones."

If so, that could indicate Apple is working directly with Google to bring additional applications to the iPhone. Although the iPhone wonit be released until June, Apple CEO Steve Jobs stated in January that the two companies had collaborated to bring Google technology to the combination iPod/smart phone.

Interest in Appleis iPhone goes beyond Google, too. Advertisers meeting at the Online Media, Marketing and Advertising Expo are excited about the potential the iPhone brings to the advertising market.

He commented "We were surprised at the OMMA conference how important the iPhone is viewed by advertisers. Advertisers at OMMA believe the iPhone marks a fundamental change in targeting the ithird screen,i that is advertising to the mobile word."

Mr. Munster is maintaining his "Outperform" rating and US$124 target price for Apple stock. Apple is currently trading at $93.84, down 0.0. (0.03%).

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