Google Barges Into Phone Market with G1 and Open-Source Android Software

The smartphone, built by Taiwan’s
HTC and introduced by Google and T-Mobile executives in New
York, will be available in the U.S. on Oct. 22 for $179 with a
two-year contract — $20 below iPhone’s cheapest model. It could rival Apple’s iPhone and further expand the capabilities of mobile Internet browsing and advertising worldwide.

The phone will be sold in T-Mobile stores only in U.S.
cities where the company has rolled out its faster, third-generation wireless
data network. By launch, that will be 21 cities, including New
York, Los Angeles, Houston
and Miami.

At its launch, the G1 is not expected to generate massive
buzz like the past two iPhone offerings, but its open source software could
have a more significant long-term impact on phone usage than Apple, which keeps
a firm grip on the iPhone’s hardware and software.

“Anyone expecting the soon-to-be-launched
Google phone to change the market like Apple’s iPhone has over the past year
will likely be disappointed — for now,” Yinka Adegoke wrote in a news
analysis for Reuters.

Google will allow developers to use its Android
software to tinker with the system and create better mobile programs and
services.

“Android promises to be the most open platform
for building mobile phone applications that we’ve seen to date because it’s
based on very familiar tools and technologies,” Jason Devitt, co-founder
of Skydeck, a new service that will allow users to manage their cell phones
over the Web, told Reuters.

Google’s entrance into the phone market could also
help give a boost to localized mobile advertising, which is still in its
earliest stages.

Larry Page, one of Google’s founders, said Tuesday
that the mobile phone industry, which sells one billion units a year worldwide,
was a tremendous opportunity for the company to expand the way people to
interact with the company’s advertising network.

“Google
is extremely dominant when it comes to Internet search and advertising.
However, if you think about the next billion Internet users, these are folks
who are more likely to experience the Internet on a phone, as opposed to a
PC,” technology analyst Charles Golvin of Forrester Research told the
NewsHour on Thursday. “In emerging economies, a PC is not a viable device
in their life, but a phone? Absolutely. For Google to be as important a brand
on the Internet for these next users, they need to be widely present on mobile
phones.”

The phone itself looks and functions like a
combination of several earlier models including the iPhone, the BlackBerry and
the Sidekick. It comes with a slide-out QWERTY keyboard, trackball and touchscreen.

“The G1 was never intended to take on the
iPhone’s sleek design, as the focus was always on better functionality. And
first impressions are that the G1 is easy to use. Even so, at first glance, you
feel that more could have been done to make this a beautiful-looking gadget. It
feels and looks plastic and clunky,” technology reporter Murad Ahmed
wrote in a Times of London review.

But the phone provides easy access to Google
applications such as Gmail, Google Talk, Google Maps with StreetView and a
compass function, YouTube and others.

One problem that the phone faces is how to sell it.
The iPhone was launched on the coattails of Apple’s successful iPod music
player, but Android is an unknown even with Google’s blessing, Adegoke wrote.

“People forget these things get to customers
through the retail channel and marketing,” Frank Meehan, the global
general manager for handsets and applications for Hong
Kong telecommunications conglomerate Hutchison Whampoa Ltd. Told
Reuters.

The G1 works on T-Mobile’s slower data network, but
it’s optimized for faster networks. It can also connect at Wi-Fi hotspots. The
data plan for the phone will cost $25 per month on top of the calling service
— toward the low end of the range for U.S. wireless carriers.

Shortly before the phone’s release, Internet retail
giant Amazon.com announced in a direct challenge to Apple’s iTunes that its
entire Amazon MP3 music store would be available on the new phone, Agence
France-Presse reported.