Google Introduces an iPhone Rival

Google and T-Mobile unveiled their answer to the iPhone on Tuesday, pulling the wraps off a slick mobile device that combines a touch screen and a keyboard and is aimed at putting the Internet in the pockets of millions of cellphone users.

The T-Mobile G1, which will be available in the United States on Oct. 22, is the first mobile phone to be powered by Google’s Android operating system. It represents a milestone in Google’s efforts to extend its dominance of the PC-based Internet to mobile phones and further loosen the control that wireless carriers have over what consumers can do with their phones.

Analysts said that the G1 did not represent the kind of revolutionary change in design and function that Apple introduced last year with the iPhone. But the G1 is likely to further accelerate two trends that will have a lasting impact on the wireless industry: the growing use of the Internet on the go, and the ability of consumers to customize their phones with their favorite functions.

“I am not sure people are going to be lining up at stores for this device,” said Rajeev Chand, an analyst with Rutberg & Company. “The iPhone was a game changer from a consumer perspective. The Google phone may be more of game changer from an industry perspective.”

The G1, which is made by the Taiwanese electronics maker HTC, has a large color touch screen that slides out to expose a full keyboard. It also has a 3-megapixel camera, G.P.S. navigation, Wi-Fi access and an Internet browser. It will sell for $179, or $20 less than the iPhone, with a two-year voice and data plan.

“This is as good a computer as you had a few years ago,” said Google’s co-founder Larry Page, who along with co-founder Sergey Brin arrived on Rollerblades at the New York stage where Google and T-Mobile held a news conference to unveil the G1.

Although several applications, including Google’s search, maps, Gmail and YouTube, come installed on the phone, the G1 is also meant to encourage third-party developers to create programs to run on it. Like Apple, Google will include an applications store, called the Android Marketplace, where the owners of the G1 and future Android-powered phones will be able to download those programs.

Google said that developers would have virtually unfettered access to the marketplace, leaving it up to consumers — not Google or T-Mobile — to decide what they want to run on their phones.

While the G1 is expected to compete with high-end smartphones like the iPhone and the BlackBerry line of devices made by Research in Motion, Google’s aims are far different from those of its rivals.

Google makes the Android software available for free to carriers and handset makers who want to use it to power their own devices. Google hopes that many will choose to do so, populating the market with mobile phones that have easy access to Google’s services. Just as it does on the PC-based Internet, Google hopes to earn money from advertising.

“For Google, Android is a cash drain,” said James Faucette, an analyst with Pacific Crest Securities. “They are going to lose money on Android as an operating system. They hope to make it up from the services that they are delivering through their infrastructure and servers.”

While Google is betting on the success of Android, it also stands to benefit from the success of other smartphones, as their owners tend to surf and search the Internet much more actively than users of less advanced phones. Indeed, Google said earlier this year that its mobile service received a disproportionate amount of traffic from iPhone users.

“We want people out there to use the Internet on their phones a lot,” Mr. Brin said in an interview. “It actually doesn’t matter if it is Android, the iPhone or something else.”

T-Mobile, is counting on the G1 to increase its sale of data plans and said it believed the devices would appeal to consumers and business users.

“I think frankly this device will have mass appeal,” said Cole Brodman, chief technology and innovation officer of T-Mobile USA, a subsidiary of Deutsche Telekom.

Android is unlikely to take the smartphone market by storm overnight. Despite its success, the iPhone accounted for just 2.8 percent of smartphones sold worldwide in the second quarter, according to Gartner, a market analysis firm. Windows Mobile, a seven-year-old Microsoft operating system that runs on phones sold by more than 160 carriers, has just 12 percent of the market.

“Nobody meets, falls in love and celebrates their 50th anniversary all at once,” said Scott Rockfeld, group product manager at Microsoft. “Success in this industry depends in solid relationships over time.”