Apple, Google and Microsoft are muscling into the mobile phone market. What's really at stake?

This month's launch of Google Voice, an application that offers U.S. customers free landline and mobile calls, is not just a bold move to build a new-age phone-service provider. It's also the latest sign of official war among the big tech companies in the mobile-phone market: Apple, Google, and Microsoft. Remember Steve Ballmer's chest-beating launch of the new Windows Mobile OS in February—and then the iPhone's 3.0 update?

You might wonder why, in the middle of a nasty recession, the major engine rooms of American innovation are jostling like crazy to break into a market that has existed since the Cold War, when Mikhail Gorbachev accidentally made the Mobira Cityman 1987's must-have accessory. But this contest is about much more than mobile phones as we know them. It's about smart phones, which have become the red-hot convergence point of telecoms and handheld computing. It's a battle that captures not only the rapid changes sweeping through this sector but the long-term strategies of three very different companies competing to realize alternative visions of the future. And with each, there's the cheery story firm flacks are peddling, and the other story—of insatiable greed and late-night scheming to achieve total market dominance.

Take Google. With its "Don't be evil" slogan, the company has offered smart-phone users an endless swoon of utopian applications—like the friend-finder Google Latitude and Google Book Search's 1.5 million free smart-phone e-books—since it launched the first Android phone with T-Mobile last year.

But beneath the marketing spin lies the cold, hard fact that 97 percent of Google's revenue comes from search advertising. And its main ways to expand this stream are to form a search monopoly by eating Yahoo and to find new (and, potentially, more invasive) methods of collecting data to target its ads more efficiently at Web users. To that end, the whole point of Google's push into the phone market is to force you to continue to search and navigate the Internet using Google products. The first Android-compatible phone, the T-Mobile G1, even has a dedicated "Google search" button, just to remind you what's at stake.

Google phones are also loaded up with a version of the Chrome browser, which doubles as a machine that feeds Web navigation and search data to Google's mother ship. This preserves Google's ability to expand its data vaults and grow its advertising model as the mobile Web takes off.

And there is even speculation that Google Voice-which uses speech recognition software to send you voice messages as SMSs and e-mails-could be linked into the same invasive advertising model behind Gmail, where the content of e-mails is scanned to target ads at users. Your idle phone chat could become a rich seam of information for Google's data banks.