BEIJING, March 26 -- Google Inc, the most popular Internet search service, has said its engineers are developing software for handheld devices and the company has no plans to build mobile phones.

    "We're not doing a mobile phone," Alan Eustace, senior vice president of engineering and research, said on Thursday at Google's office in Atlanta. During an event earlier in the day, Eustace said, "I'd like to find something that is broader, rather than do yet another mobile device."

    The remarks contradict reports on Web logs and online news sites this month that California-based Google is working with a handset manufacturer to develop a phone. Google will "look across all of the devices" rather than focusing on individual handsets, Eustace said.

    "Right now it is very difficult for companies to deploy applications," he said. "Mobile is a space where it's very difficult to reach a lot of users. That's a premise we're thinking about."

    Google, Yahoo! Inc and Microsoft Corp are racing to develop mobile products such as e-mail, online maps and search engines to tap consumers that want to surf the Web on the move. Mobile devices outsold personal computers by more than four to one last year, according to market research firm Gartner Inc.

    Shares of Google dropped 21 US cents to US$461.83 at 4pm New York time in Nasdaq Stock Market trading. They have risen 35 percent in the past year.

    Google will continue to work with device makers including Motorola Inc and service providers such as Vodafone Group Plc to develop and promote mobile products, Eustace said.

    "If you can do that, it's very clear we'll be able to add a lot of potential users," he said.

    Apple Inc's plan to release a mobile device called iPhone in the US in June helped fuel rumors of the "Google Phone." Google Chief Executive Officer Eric Schmidt sits on the board of Apple, which also makes the iPod music player.

    "We believe Google is working with, not against Apple in the mobile world," Piper Jaffray & Co analyst Gene Munster wrote on Thursday in a note. Google is probably building mobile applications that will work with the iPhone and other devices, he said.

    Engineers at Google's Atlanta office work on projects including the Google Earth mapping program and a software tool kit for writing Internet applications. Employees also work on programs to place and track ads on radio, print and television, said Scott Blum, an engineer in the office.

    The Atlanta office, which has a staff of about 50 and is located close to the Georgia Institute of Technology campus, also worked on Google Image Labeler, a program that allows users to give feedback on the images retrieved when performing Internet searches.

    (Source: Shanghai Daily)