Next Google phone will be mobile wallet: Schmidt

SAN FRANCISCO: A new Google mobile phone imbedded with a chip that makes it a virtual wallet so people can "tap and pay" is poised to make its debut, the Internet giant's chief said Monday.

The successor to the Internet firm's Nexus One smartphone runs on fresh "Gingerbread" software and is imbedded with a near-field communication chip for financial transactions, according to Google chief executive Eric Schmidt.

"I have here an unannounced product that I carry around with me," Schmidt said while pulling a touch-screen smartphone from a jacket pocket during an on-stage chat at a Web 2.0 Conference in San Francisco.

"You will be able to take these mobile devices that will be able to do commerce," he continued. "Essentially, bump for everything and eventually replace credit cards. In the industry it is referred to as tap-and-pay."

The near-field chips store personal data that can be transmitted to readers, say at a shop checkout stand, by tapping a handset on a pad.

Schmidt hid markings that might reveal which company made the mobile phone, and playfully stuck with referring to it only as an unannounced product.

Google worked with Taiwanese electronics titan HTC to make the Nexus One handsets it released in January in a high profile entry into the booming smartphone market.

Nexus One smartphones built on Google's Android platform won raves for their capabilities but weren't a hit with buyers.

In a country where mobile phones are generally tied to specific wireless carriers -- Apple iPhones with AT&T, for example -- Google took a novel approach to selling the Nexus One without ties to, or subsidies from, any carriers.

Google eventually abandoned selling Nexus One handsets only online, switching to marketing the smartphones in real-world stores.

"I don't think people understand how powerful these things are," Schmidt said of smartphones. "This is a really good day for mobile."