Today Google announced their Android open source mobile phone platform. The long awaited deal revealed the creation of the Open Handset Alliance; 30 odd companies including Motorola, Qualcomm, HTC and T-Mobile; who are pledged to reduce the cost of developing and distributing mobile devices and services.

But more importantly, the nature of the platform will drive innovation in handset and network features. And the innovation will drive revenue. And of course with Google backing the whole thing with deep pockets, you can expect a rash of experimental contextual advertising concepts. The official hardware won’t appear before the end of 2008 although no doubt a few hacked existing handsets running the OS will appear earlier.

Google’s CEO Eric Schmidt tells us:

“This partnership will help unleash the potential of mobile technology for billions of users around the world. A fresh approach to fostering innovation in the mobile industry will help shape a new computing environment that will change the way people access and share information in the future.”

I’ve long said that the future of mobile telephony is advertising. Advertising will support the inexorable drop in call rates and fund the high speed connections that will bring IPTV to the mobile handset for the masses. Today’s Android announcement is a milestone. Read more on Google’s official blog (a bit easier to take in than the dull press release).