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 widely-anticipated 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 other "smartphones" the device is meant to broaden the appeal of Web surfing on the go.

"If we see more mobile Web usage we'll be happy," Google co-founder Sergey Brin told Reuters after arriving at the launch on roller-blades.

His company, a powerhouse in Web advertising, would benefit if Android led more cell users to spend time on the Web, no matter which phone they are using.

Google is well ahead of rivals Yahoo Inc (YHOO.O) and Microsoft Corp (MSFT.O) in Web search on computers, but it wants to use Android to ensure this dominance carries over to the phone when mobile Web surfing becomes more popular.

But while no clear mobile Web winner has emerged so far, Google faces stiff competition from longer established phone players such as Nokia (NOK1V.HE), Research In Motion Ltd's (RIM.TO) BlackBerry and Microsoft, as well as Apple.

Analysts saw the device as a "good first step" rather than an iPhone killer, but some expect as many as 400,000 to be sold in the United States by year-end. A T-Mobile executive said the estimate was "not incredible."

When it becomes available to U.S. 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 other European countries such as Germany, Netherlands and the Czech Republic in 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 be changed by outside developers.

Asked if the user interface of future Google phones would look anything like the first one, Andy Rubin, who developed Android for Google, said: "Its completely replaceable."

For example, Leslie Grandy, T-Mobile USA's product development vice president sees the carrier selling a range of Google-powered phones in future, including more basic ones without a touch-screen or full keyboards.