Images of the new ‘branded’ Google phone surfaced this week after months of rumors. This will be a branded Google phone, not one developed by the likes of HTC, that will use an even newer version of Android than that of the Droid?the only Android phone currently running 2.0. Most interesting is that this phone may use VOIP, which uses a wireless connection to the Internet for calls rather than a cellular network. For the end user this could could mean lower or even free cell phone bills (you will still pay for data).

VOIP  (Voice Over Internet Protocol) uses an Internet connection to transmit voice signals the same way emails and text messages are transmitted, and is far cheaper than using a cell phone network. Services like Skype are becoming more attractive, offering free domestic calls, no minutes to count, no roaming, and international calls at a fraction of the cost of cell phone rates, but even Skype has not been convenient enough for consumers to abandon their familiar phone service providers.

For the most part, computers have been the only hardware that was convenient to make VOIP calls. It required the caller to use a headset to both send and receive messages (or monitor mounted speaker/mic or one of the newer Wifi phones). Smartphones were the next logical device to get VOIP, and like their PC counterparts required the user to download an app and secure a wireless connection.

The Google phone may be the first smartphone designed specifically for VOIP service, and will come with all of the goodies Google has introduced this year:

1. The Android operating system in a newer version than what is currently offered on the Droid, on schedule to sell a million units before the end of the year, far ahead of analysts’ expectations.
2. Google Voice, Google’s free multi-phone number and message management application, currently available by invitation only and only in the US.
3. Google Latitude, the free app that lets friends share their locations with one another.
4. Google Maps, the free GPS app for mobile phones offering voice guided, turn-by- turn directions that could replace not only the pricier phone apps, but stand-alone GPS systems altogether.

The last piece of the puzzle is WiFi connections or hotspots. Lucky residents of Seattle, Austin, San Francisco and Atlanta have fairly reliable, complimentary WiFi coverage. And of course, if you find yourself in Beijing, the city was fully covered prior to the 2008 Summer Olympics. Corporate sponsored WiFi is growing: Google paid for WiFi in 45 US airports over this holiday season, offering the service free to travelers, and bit by bit companies are seeing WiFi installations as effective branding strategies.

But for now, WiFi hotspots and connections are spotty at best. Even hands- free calling on the road becomes impossible without a connection, and we can only wait for more auto manufacturers to follow General Motors who began offering the Autonet WiFi router in GM SUVs and trucks in November. At $500 for the device plus $59 a month for 5GB data service, it’s a pricy and limited solution.

Verizon offers a pocket-sized solution with MiFi, providing a wireless connection for up to five devices virtually anywhere for $60 a month with two year contract. Alternately, Google phone users may be able to purchase just a data plan from a cell phone provider, assuming providers cooperate.

The best solution would be an integrated mobile hotspot in the Google phone, activated only when an external hotspot was not detected.

The Google phone is expected as early as January 2010.