Google rolls out rival to iPhone

By Sinead Carew and Yinka Adegoke

NEW YORK (Reuters) - T-Mobile has rolled out Google's answer to the iPhone as the Web search giant makes its biggest stab yet at leaping from consumers' computers into their pockets with a device cheaper than rival Apple offers.

The G1 phone, introduced on Tuesday made by HTC Corp (2498.TW), has a touch-sensitive screen, a computer-like keyboard, Wi-Fi connections and uses Google's new Android operating system.

Available in three colors -- black, white and brown -- it includes familiar Google services, such as Google Maps, Gmail and YouTube. Like the iPhone and a handful of other "smartphones" -- including Research In Motion Ltd's (RIM.TO) BlackBerry -- the device is meant to broaden the appeal of playing games, enjoying music and Web surfing while on the go.

Google is well ahead of rivals Yahoo Inc (YHOO.O) and Microsoft Corp (MSFT.O) in Web search on computers and hopes to use Android to maintain its dominance in search related ad sales as cell phone Web use gains prominence. So far, no clear winner has emerged in the mobile Web race, which also includes Nokia and Microsoft.

Analysts see as many as 400,000 G1 sales in the United States this year, which a T-Mobile executive said was "not incredible."

"If we see more mobile Web usage we'll be happy," Google co-founder Sergey Brin told Reuters, suggesting his company, a powerhouse in Web advertising, would benefit as more consumers spend time on the Internet.

When it becomes available to consumers on October 22, the G1 will sell for about $179 -- slightly cheaper than the entry-level price of $199 for Apple Inc's (AAPL.O) iPhone -- with a two-year contract.

The G1 will be launched by T-Mobile's UK unit in November and in the other European countries in which it operates in during the first quarter of 2009.

"The G1 doesn't threaten Apple now, but Android has raised the bar for competing mobile platforms. The bigger concern here is for Microsoft and Nokia if Google can win over the hearts and minds of operators and developers," said Geoff Blaber, an analyst with British firm CCS Insight.

NEXT GOOGLE PHONE MAY CHANGE

Both Google and Apple are wooing developers to create applications for their devices, but unlike Apple, which keeps a tight grip on the iPhone's hardware and operating software, Google's Android is open to outside developers.

Asked whether the interface of future Google phones would look anything like the current one, Andy Rubin, who oversaw the development of Android at Google, said: "Its completely replaceable."

The new phone will feature Android Market, where customers can find and download applications to expand and personalize their phones.

"Because the platform is open, we think Android is somewhat future proof," said Rubin, Google director of mobile platforms, speaking at the launch.

A similar strategy helped increase the buzz around Apple's second-generation iPhone, which can support more than 3,000 applications available online.