It’s here: Google, T-Mobile unveil the G1 phone

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After months of secrecy and speculation, T-Mobile USA this morning unveiled the first mobile phone to run on Google’s Android operating system.

Called the G1, the phone made by Taiwan-based HTC will cost $179 with a two-year contract and go on sale Oct. 22. There will be two data plans: one for $25 with unlimited Web surfing and some messaging, the other for $35 with unlimited Web surfing and messaging. T-Mobile customers in the U.S. can pre-order the G1 in limited quantities, beginning today.

Analysts expect T-Mobile to sell fewer than 500,000 of the phones. During the news conference, Christopher Schläffer, group product and innovation officer of Deutsche Telekom, said his company is determined to bring the mobile Internet to the mass market.

As we explained in an earlier post, there’s a lot at stake for Google as it tries extend its lucrative advertising empire to the mobile Web. The G1 allows users to search the Web, get driving directions, play music and watch YouTube videos, all by swiping a touch screen, very similar to the iPhone. The G1 comes with a version of Google Maps with a special street-view feature: a compass mode that makes the scene you are viewing move as you do. A slide-out keyboard allows users to fire off instant messages or send e-mails.

The pitch: Anything you can do on the Web, you will be able to do on the G1. It’s a salvo in the smartphone wars as Google takes on Apple’s iPhone and Research in Motion’s BlackBerry, which combined dominate that market. The Wall Street Journal’s Walt Mossberg called the G1 ‘the first real competitor to the iPhone.’

Google founders Larry Page and Sergey Brin made a surprise appearance at the news conference in New York to promote the phone, which will rely on the innovation of independent software developers to drive new applications.

‘I am a bit of a geek. I really like tinkering with things,’ Brin said. He has been playing with the phone ‘for a while now,’ he said. He wrote an application that measured how much time elapsed from the time he threw the phone in the air to the time he caught it or it crashed to the floor. ‘It’s very exciting for me as a computer geek to have a phone that I can play with and modify and innovate on just the way I have done with computers.’

Apple introduced the iPhone in June 2007, radically reshaping consumer expectations for mobile phones. Now Google, along with wireless partner T-Mobile and hardware partner HTC, is trying to bring a similar experience to the masses in the United States and Europe.

Sales of search ads on mobile phones could double to $181.1 million in the U.S. in the next year, reports research firm EMarketer. That’s a tiny fraction of the ad revenue generated by Web search on computers (Google alone generated $16.6 billion in revenue last year), but the market is expected to keep growing fast as more smartphones come out. Google is hoping to break the tight hold that carriers usually exert over the kinds of applications that run on their devices and make its applications more broadly available. It formed the Open Handset Alliance with industry partners in November to develop the Android software.

T-Mobile executives said today that the rise of mobile Internet traffic and revenue is the dominant trend for the wireless industry going forward.

T-Mobile USA’s chief technology and innovation officer, Cole Brodman, said the collaboration with Google and HTC began three years ago. Brodman said T-Mobile realized it had to open up its handsets to drive innovation. G1 users will be able to download free applications from the Android Market.

‘It’s time to change,’ Brodman said.

-- Jessica Guynn