T-Mobile unveils 'Google phone'
T-Mobile USA Inc. showed off the first mobile phone to run on Google Inc.'s Android operating system in New York today, courting users of the iPhone and BlackBerry.
The G1 phone, made by Taoyuan, Taiwan-based HTC Corp., features a touch-screen as well as a slide-out keyboard. The device, which will go on sale in U.S. stores Oct. 22, will cost $179 with a two-year contract, said T-Mobile, the provider of wireless service for the G1.
Google is attempting to extend its top-ranked Internet search engine, and the ad revenue that comes with it, into mobile devices. Sales from search ads on phones may double to $181.1 million in the U.S. next year, according to New York-based research firm EMarketer Inc. The phone pits Google against Apple Inc. and Research In Motion Ltd., which account for two-thirds of the smart-phone market.
"Wireless Internet access will be the most important and prevalent way that people access the Internet within three to five years," said Jeffrey Lindsay, an analyst at Sanford C. Bernstein & Co. in New York. He has an "outperform" rating on Google's shares, which he doesn't own. "Any player that has a longer-term strategic vision has to get into that space."
The G1 lets customers use Google applications to search the Web, get directions and read the news. The phone also features a music player that connects to Amazon.com Inc.'s music Web site.
Existing U.S. T-Mobile customers can pre-order the G1 starting today, T-Mobile Chief Technology Officer Cole Brodman said at a news conference today. The device will go on sale outside of the U.S. starting in November, becoming available in the UK then and across Europe in the first quarter.
"U.S. consumers overconsume everything; we love that about them," Brodman said. "What's really been lacking is a compelling set of applications and devices."
T-Mobile will sell fewer than 500,000 of the phones after they're released in the fourth quarter, analysts say. Forrester Research Inc. analyst Charles Golvin said the phone won't sell more than half a million if it goes on sale near the beginning of the quarter. Chris Ambrosio, executive director of Strategy Analytics Inc., had expected the handset to go on sale in the second half of the quarter, and T-Mobile may sell 400,000 units.
Apple sold more than 1 million iPhone 3Gs in the first three days after their July debut. The touch-screen phone that combines the best-selling iPod music player with a Web-equipped handset runs on AT&T Inc.'s network in the U.S.
"I doubt that anything can match the hoopla that has been created by Apple," said Shiv Bakhshi, who tracks mobile devices for research company IDC in Bellevue, Washington. "That cult following may be missing with the Google phone."
Google formed the Open Handset Alliance in November to develop Android, working on the software with carriers T-Mobile and Sprint Nextel Corp., chipmaker Intel Corp., and mobile-phone manufacturer Motorola Inc.
T-Mobile is the fourth-largest U.S. mobile-phone carrier, after AT&T Inc., Verizon Wireless and Sprint. AT&T and Verizon aren't members of the Android group.
Android is based on the free Linux operating system and is open to any programmer who wants to develop features for wireless devices. Software developers can build custom applications to run with the program.
By offering code anyone can use, Google is seeking to break the hold phone companies have over the kinds of applications that run on their devices. New products may include location-based ads for shops and movie theaters, or mobile access to services such as EBay Inc.'s auctions.
Research In Motion's BlackBerry led the U.S. smart-phone market last quarter, with more than half of sales, according to research firm IDC in Framingham, Massachusetts. Apple's iPhone ranked second, followed by Palm Inc.'s devices.
<div class="infoBox"> <h1>More Coverage</h1> <div class="infoBoxContent"> <div class="infoArea"> <h2>Video</h2> <ul class="video"> <li><a href="javascript:void(window.open('http://video.ap.org/vws/search/aspx/ap.aspx?t=s78&p=ENAPscitech_ENAPscitech&g=0923t_google_android&f=ILARL','_blank','width=788,height=598,status=1,scrollbars=1,resizable=1'));">Hello? It's Google calling </a></li> </ul> </div> </div> </div>