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Android running on devices at Computex was "snappy," while Windows 7 less so, according to a Gartner report published Monday. The report concluded that there is momentum behind the ARM chip platform.

"Android is the first Linux OS backed by a strong consumer brand--Google," write analysts Christian Heidarson and Ben Lee in Gartner's Semiconductor DQ Monday Report.

Though they stopped short of endorsing the platform--saying that Android is a work-in-progress--they did offer some hope for future Android-based devices running on ARM processors versus Windows 7-based Netbooks running on Intel's Atom processor. "There is a sense among PC manufacturers that although Android is not ready for prime time today--or tomorrow--it will inevitably get there," they wrote.

The report continued. "When Android did work, we found that the user interface was very snappy on relatively low-performance ARM processors, more so than on Windows 7 on (Intel's) Atom. What we learned about support from critical software vendors convinced us that there is momentum behind ARM in the PC industry, enabled by Android."

In an interview last month, Michael Rayfield, general manager of the mobile business unit at graphics chipmaker Nvidia, echoed this sentiment. "Android has got a roar ahead of it," he said. But he added: "I think it's three of four quarters from a large-screen device." Nvidia is developing its ARM-based Tegra chip platform for Android as well as Windows CE.

Other chipmakers such as Freescale Semiconductor are also touting the potential for Android on ARM-based chips. "The potential that Google has--this has got everybody's attention," said Glen Burchers, director of global consumer segment marketing at Freescale, in an interview last month.

The Gartner report was cited earlier by IDG News.

Nvidia has its own grand scheme for Netbooks, the tiny laptops that have gained wide acceptance running on software and hardware from Microsoft and Intel, respectively.

Michael Rayfield, general manager of Nvidia's mobile business unit

(Credit: Nvidia)

At the giant Computex conference starting Tuesday in Taiwan, Nvidia will be showing hardware running on its Tegra processor and Windows CE, the version of Windows used most prominently to date in business-use handheld computers. And, down the road, Nvidia has high hopes for devices based on Google's Android.

Tegra is a system-on-a-chip that integrates a processor based on a design from U.K.-based ARM and Nvidia's GeForce graphics silicon, among other functions. The goal is to bring robust PC-like graphics to small devices such as Netbooks and handheld devices--the latter also referred to as mobile Internet devices.

In a break from Computex tradition, Nvidia will have phone companies in tow. "We're bringing the carriers in. I've got 100 people showing up from carriers at Computex," Michael Rayfield, general manager of Nvidia's mobile business unit, said in a phone interview Friday.

Tegra will be shown at the trade show in devices that manufacturers "are about ready to release into production," Rayfield said.

"The Internet is all about (Adobe) flash and HD (high-definition) now so we've built a platform that can do that," he said. "There are two operating systems we support. Microsoft Windows CE and, as it becomes more interesting for large screens, (Google) Android," Rayfield said.

"We do Android for smartphones and we're working to do hardware acceleration on Android as it goes to larger displays," Rayfield said. In February at the Mobile World Congress in Barcelona, Nvidia announced that it is working with Google and the Open Handset Alliance to get its Tegra processor into phones based on Google's Android operating system.

Android will likely appear commercially in larger devices, such as Netbooks, by the middle of next year, Rayfield said. "Android, as it stands now, does not do hardware acceleration," he said, referring to graphics-based acceleration of video and other multimedia applications. "We've already got 720p acceleration on Android internally," he said. 720p is a lower-resolution standard for high-definition video.

Rayfield continued. "Android has got a roar ahead of it but I think it's three of four quarters from a large-screen device. And the market wants something interesting before that."

Acer executives said that Google's Android still has a long way to go before it can be used as the operating system for the hot new category of laptops known as Netbooks. And the CEO of the Taiwanese company hinted that its Netbooks may soon end up on Verizon Wireless' network.

Acer CEO Gianfranco Lanci

(Credit: Marguerite Reardon CNET Networks)

At a press event Tuesday night to launch the company's new line of consumer and business computers, Chief Executive Gianfranco Lanci and Jim Wong head of Acer's IT products business line, told reporters that the company plans to use Google's Android operating system on its upcoming smartphone, but that it doesn't believe the operating system is ready for Netbook computers.

Acer announced its new smartphone in February at the GSMA Mobile World Congress in Barcelona.

"For a Netbook, you really need to be able to view a full Web for the total Internet experience," Wong said. "And Android is not that yet."

Acer currently offers its inexpensive Netbooks through U.S. wireless operator AT&T. And Lanci said during an interview after the event that the company is working with other U.S. wireless operators to bring Netbooks to their networks, too. He said that the company would be making an announcement very soon. But he stopped short of singling out any one carrier for this new announcement.

Given the company's existing relationship with AT&T, it's not a stretch to anticipate that the big announcement will likely be with Verizon Wireless. Verizon has already confirmed it is planning to sell a subsidized Netbook. And the company was touting its new strategy to get alternative devices, such as Netbooks, on its 3G wireless network last week at the CTIA tradeshow in Las Vegas.

As for Android, Lanci also agreed that he doesn't believe the software is ready for prime time.

"Android in my opinion is for communications," he said. "And Windows comes at the market from the computing side. An ideal solution would offer both. So right now we are using Android for our smartphone, and we are testing it on our Netbooks. But I think everybody in the industry is testing Android on Netbooks. "

Acer's latest Aspire One Netbook

(Credit: Marguerite Reardon CNET )

Indeed, it appears that every Netbook is looking at Android. Last week, Hewlett-Packard confirmed that it is testing Android on its Netbooks. Asustek Computer has already said it is considering using Android. And Dell is also considering the software for its upcoming smartphone.

Android is a Linux-based operating system that was originally designed for cell phones. But now experts are predicting that the open-source operating system could be used on other devices, such as the emerging low-cost laptops known as Netbooks. In fact, market research firm Ovum recently predicted that Android-powered Netbooks will emerge in 2009, as manufacturers attempt to drive the price of Netbooks to around $200 or less.

But Lanci said that the company is quite happy using Windows XP on its Netbooks. The older generation of Windows is cheap, familiar to users, and provides the Internet browsing experience that is essential to the Netbook.

Though Linux operating systems, like Android, are free, the older version of Windows is actually inexpensive enough at around $25 to $50 per license that it doesn't affect the cost of these devices too much. As a result, Lanci said that Windows Netbooks are out-selling other Linux-based models.

"XP is a good solution for the price performance," he said. "If you look at it, the number of devices that are sold with Linux is very small."

Netbooks are the hottest segment of the computer market, and Lanci said he expects the market to continue to be strong this year even with the economic downturn. But he noted that price will play a major factor in adoption. And he said that subsidies by wireless providers, especially in the U.S. and European markets, are essential to adoption.

He said the sweet spot for the market is to sell these devices for $99 or less, with $49 being the ideal price. Just last week, the company announced a pilot program with AT&T to sell Acer Netbooks in Atlanta and Philadelphia for $49 along with a home and mobile data package that bundles DSL and 3G wireless service for $60 a month.

"Subsidies in the U.S. and Europe are very important," he said. "I think $49 is the best price. But it has to be offered with the right data plan."

Intel is making a bid to become a force in smartphones. This will test its ability to compete in arguably the most important chip market outside of PCs.

The deal struck this week with Taiwan Semiconductor Manufacturing Co. will put the Intel architecture into the same factories that churn out chips for companies like Qualcomm and Texas Instruments, which use an alternative architecture called ARM--the choice for many small devices, cell phones, and most smartphones, including the Apple iPhone, BlackBerry Storm, and Google-based Android phones.

ARM has always been a thorn in Intel's side. So much so that Intel acquired the StrongARM architecture in 1997, turned into Intel XScale, and aimed it at handhelds (most prominently iPaq handhelds sold by Compaq and then Hewlett-Packard). Before that, StrongARM had been used in the Apple Newton (a primitive precursor to the iPhone) and other small devices.

But Intel sold the money-losing XScale business to Marvell in 2006. And so ended Intel's attempt to compete ARM to ARM in the small device space.

Intel processors are not a player in the market for smartphones like T-Mobile's G1, which uses an ARM-based Qualcomm chip

(Credit: T-Mobile)

What happened? The small consumer device and communications chip business is not the PC business and, consequently, not an area where Intel has historically been competitive. But that doesn't mean Intel can afford to ignore this space. Handheld personal computing has arrived (if you hadn't noticed). The iPhone, Blackberry, and Android phones are virtually handheld PCs--with Intel processors nowhere to be seen.

So this time instead of coming up with an ARM chip, Intel is trying to shoehorn its successful x86 architecture into the ARM universe of smart phones, consumer electronics, and the amorphous, though typically profitable, "embedded" market. TSMC excels in building chips for all of these markets. The world's largest contract chip manufacturer operates successfully on gross margins much lower than Intel's enviable x86 PC margins, typically north of 50 percent (as this CNET Blog Network piece points out).

And one market where Intel would like to succeed (and some would say must succeed) is smartphones because of its sheer size and because "that's where the PC functionality is moving toward," said Doug Freedman at Broadpoint AmTech. Though markets for hardware that goes into, for example, industrial or medical hardware, will be important, it's the smartphone market that will test Intel's ability to compete profitably in a consumer space outside of PCs.

Just how big is the overall cell phone market? On a unit basis, it is about five times the size of the PC market. There were about 1.22 billion handsets shipped in 2008, while the PC market is forecast at 257 million units in 2009, according to Gartner.

But Intel cannot operate the way it does in the PC world--where its credo almost seems to be: if we build it, they (HP, Dell, Acer) will come. This won't work in the cell phone industry. Service providers and handset makers are center stage, hardware is at best a side show. So, hooking up with TSMC is a way for Intel to make itself more palatable to cell phone companies, which are not used to dealing with the 800-pound PC chip gorilla. "By going through a TSMC, it is perceived less as an Intel move and more as, hey, I'm just another source for you the handset maker because you're already used to buying stuff from TSMC," said Ian Lao, an analyst at In-Stat. "It's insulating the gorilla thing."

And it's none too early. Qualcomm is now pushing the performance envelope with its Snapdragon platform, Nvidia is hawking its graphics-intensive Tegra technology, and Texas Instruments is revving up its OMAP chips to achieve better performance per watt.

In other words, while these chip companies are not wavering from their longstanding strong suit of power frugality--an imperative in the cell phone world--they are also beginning to ratchet up chip speeds to 1GHz and above and add more processing cores. And that's Intel's strong suit.

"For ARM developers, multi-core implementations will address much of the performance differential," said In-Stat's Lao. Look no further than Qualcomm. The future Qualcomm QSD8672 chip will be a dual-core Snapdragon that features two CPU computing cores capable of 1.5GHz performance, 1080p high-definition video, Wi-Fi, mobile TV, and GPS. The graphics core is based on Advanced Micro Devices' ATI unit's technology.

Hmm...Dual-core processor, ATI graphics, high-definition video? Sounds a lot like a PC. Indeed one of the burning questions is whether PC makers will begin running Microsoft's operating systems on ARM-based devices, according to Lao.

"The next 9 to 18 months will be quite interesting to watch," he said. "Can Intel get down to the cost and power levels needed? Will they be able to get the carrier and handset makers aboard? There will definitely be a market shakeup."

For an OS to wrestle market share from Microsoft's Windows, it will need two things: the OS-maker's support and low licensing fees, an analyst said.

This rings true even on the Netbook front, a relatively new PC segment, and even for Microsoft.

Recently, the Android OS backed by Google was unofficially ported to an Asus Eee PC Netbook, and according to online reports, the Taiwanese manufacturer has set up a team to develop a Netbook running on the Linux-based OS.

Calvin Huang, an analyst at Daiwa Securities, told ZDNet Asia in an interview, Android is poised to "kill Microsoft" on several fronts: a big vendor-backed OS will likely provide better hardware support, and open source Android's license is free.

"Without any strong backup, Linux is just a niche platform. Now with Google's support, Android has a better chance to win users from Microsoft," said Huang.

According to Google's developers, what distinguishes Android from other Linux platforms is its Dalvik virtual machine. It provides a layer for programmers so they do not have to worry about the underlying hardware on which Android is deployed.

While this helps app developers building software for Android's mobile app market, this benefit can extend to the broader developer community, should Android find itself on Netbooks commercially.

The current economic downturn will also likely play a part in pushing manufacturers to Android, Huang added. "The license fee really matters and manufacturers don't like to be taxed by Microsoft. An Android Netbook will definitely cost less than a Windows Netbook."

But there is still the issue of user acceptance.

Several Netbooks, including Asus' Eee PC and MSI's Wind devices first came with Linux OSes, but manufacturers started looking to Windows after resistance from consumers and stores started seeing returns from customers who did not like the interfaces.

In the Philippines, Asus dropped Linux on all of its Eee PC models in the country because Filipinos were not taking to the Linux OS well, according to an Asus marketing manager.

However, Huang thinks it is a matter of time for Android. "Users need to get used to a non-Windows OS. Microsoft should be fine for the next two to three years. (After that) Google will change Microsoft's dominance," said Huang.

Another factor likely to help push user acceptance is Android's release to customers on mobile phones, providing an inroad to penetrating this market.

Victoria Ho of ZDNet Asia reported from Singapore.

Nvidia is working with Google on Android phones as it veers off from its Windows-Mobile-only strategy.

On Monday, at the Mobile World Congress in Barcelona, Nvidia announced that it is working with Google and the Open Handset Alliance to get its Tegra processor into Android phones. Tegra is a system-on-a-chip that integrates an ARM applications processor and Nvidia's GeForce graphics silicon, among other functions. The goal is to bring robust PC-like graphics to small devices.

Tegra aims at Android phones

(Credit: Nvidia)

"We welcome Nvidia's support of Android on Tegra," Andy Rubin, Google's senior director of mobile platforms, said in a statement.

Since spring of last year, Nvidia has been talking up Tegra as a chip aimed exclusively at Windows Mobile smartphones. Not anymore. "By supporting Android, manufacturers and operators can now easily use a Tegra processor to build mobile phones," Nvidia said in a statement.

Nvidia also said Monday that its Tegra chip will enable a $99, always-on, always-connected mobile internet device (MID) capable of playing back high-definition video and going for "days between battery charges." This would be based on Windows Mobile, according to Nvidia.

The Santa Clara, Calif., company said it has partnered with ST-Ericsson to add 3G communication capability to the Windows platform.

Less than a year after announcing Android, the open-source phone operating system intended to jump-start the mobile Internet, Google began sharing the project's underlying source code.

Google opened the doors on its Android Open Source Project on Tuesday. (Click to enlarge.)

(Credit: CNET News)

The Android Open Source Project site includes a project list, a feature description, guides to the roles people can have in the project and how to contribute, and of course the Android source code itself.

Google has one team of programmers building the software and another professional services group to help support phone makers building Android phones. Now, though, as T-Mobile's G1 arrives on the market, Google hopes to multiply that by drawing upon the collective energy of outside contributors to the project.

"Our plan is a launching point for a much more vibrant open-source community," said Rich Miner, manager of Google's mobile platforms group. "For the past almost four years, this has been a large effort between Google and our partners. There have been a lot of people working on the code, but that's going to be multiplied by several orders of magnitude."

Open-source software can be freely used, modified, and redistributed by anyone, freedoms that make it a daunting competitor to proprietary software companies that charge for the code. Although open-source software rarely has been the sole basis for a thriving company, it can be a powerful tool to aid a broader agenda. Sophisticated technology companies such as IBM, Oracle, and even Apple often subsidize open-source projects for that reason, and Android fits into that category.

Android beyond the T-Mobile G1
Four members of the Open Handset Alliance, which co-developed the Android software, build mobile phones: HTC, which build the T-Mobile G1, as well as Motorola, LG Electronics, and Samsung. And another alliance member, Wind River Systems, believes Android will power consumer electronics devices including set-top boxes and in-car computing systems.

Now that Android is open-source software, though, other manufacturers may use it, and Miner said they will. Indeed, Wind River said Kyocera is building an Android phone.

"Think what happed to PC clones in the 1980s and 1990s timeframe. We're starting to see coming out of Taiwan the equivalent of a Micron motherboard," inexpensive mobile phone hardware that now can be made useful with Android, Miner said.

The HTC-built T-Mobile G1 is the first Android-powered phone.

(Credit: Sarah Tew/CNET Networks)

This time, though, Microsoft Windows isn't going to be the operating system that spreads like wildfire, if Google has anything to do with it. "There are a billion mobile phones sold every year that don't have a good, highly connected mobile operating system," Miner said. Android is intended as an answer to that issue, and one that sidesteps the controls over software by rival operating systems such as Windows Mobile and Nokia's Symbian, he said.

"We feel fairly strongly, and it's resonating loudly through the industry, that innovation is maximized when no one entity controls a platform," Miner said.

Adding open to open source
It's a maxim among open-source fans that projects that begin as open source fare better as such than those that begin as proprietary projects and are retrofitted with an open-source governance. For example, the Linux kernel project has thrived as an open-source project since its earliest days, with various different ways people or companies can involve themselves, but it took several painful years before the Mozilla open-source Netscape project finally became relevant in the form of Firefox.

And some open-source fans have criticized Google for being too closed with Android in its early stages. But Miner insists that Android, while initially developed in-house, is indeed a true open-source project.

"It was built with intention of open-sourcing it," Miner said, pointing specifically to project details such as its architecture, comments in the code, and the code's structure. "We decided we didn't need to build release 1.0 as open source...We engineered 1.0 as a best-in-class, fully staffed, engineered product. Having delivered that, we think it's time to start leveraging the benefits of what open source can bring.

The code is managed by the Android Open Source Project, and anyone contributing code to the project must sign a Contributor's License Agreement, Google said. The project is separate from Google, the company said, but it's not immediately clear just how independent.

Android ingredients
Android is big--with 11 million lines of code, about 8.6 million of them open-source according to an earlier interview with project leader Andy Rubin. But what's in Android exactly?

At the foundation is a stripped-down Linux kernel that communicates with a phone's hardware, and Android supports multiple phone processors. Much of the Android work, though, takes place one level above that.

On conventional computers, software runs directly on that operating system kernel. Android, though, includes a "virtual machine" software layer called Dalvik that runs applications written in the Java programming language. Dalvik isn't a part of the mainstream Java community built by Sun Microsystems, but it's very close from a programming perspective.

A host of built-in applications are available to run on Dalvik, including software for dialing the phone, using online maps, browsing the Web, using e-mail and Gmail, and managing contacts. In addition, Open Handset Alliance partners contributed software, including a speech-recognition engine from Nuance and audio and video decoder software from Packet Video.

With this flexibility, though, can comes chaos. Google said it will offer a compatibility test suite to ensure various versions of Android remain compatible.

One advantage of using this virtual machine technology is that Android programmers don't have to worry about what underlying hardware a phone uses. That's an important factor when it comes to sharing software, most notably through Google's Android Market download service, because programmers won't have build different versions of software for one phone processor or another, and people won't have to know this obscure information either.

However, Dalvik doesn't get around all the complexities of the computing world. For example, a game might require a touch screen, but not all Android phones necessarily will have that higher-end feature. For that reason, Google plans to build a profiling feature into the Android Market so users will be able to download only software appropriate for their model. With only one Android phone on the market until 2009, that complication is a moot point for now.

Updated 4 p.m. PDT to correct Miner's title.

T-Mobile G1, the first phone powered by Google's Android software

(Credit: T-Mobile)

Attention coders: Google has released version 1.0 of the Android software developer kit.

The kit lets programmers create applications that will run on Android phones, even before T-Mobile starts selling the first Android-powered G1 on October 22. The biggest difference from the previous Android SDK 0.9: software built with version 1.0 will actually, not just probably, work on those real-world phones, according to the SDK release notes.

Google hopes its Android operating system project will help spur the mobile phone industry into a more enthusiastic embrace of Internet technology. Google of course profits from ads next to search results, and Google Maps opens up other advertising possibilities that are more closely tied to a phone user's physical location.

A major part of the Android effort is Google's attempt to woo outside programmers into writing their own applications for Android phones, because Google hopes to bring the easier innovation of the PC market to the relatively closed mobile phone industry. The SDK is a key part of that effort, as is a forthcoming application download site called the Android Market. That market won't necessarily let people sell Android applications at first, though.

Also in the SDK release notes, Google called out some specific changes, such as some new abilities to make use of Android phone sensors, handle audio files, and use Wi-Fi networks. Serious programmers can look at Google's catalog of API (application programming interface) differences.

Google couldn't help adding a little nerd humor to the release notes:

"We regret to inform developers that Android 1.0 will not include support for dot-matrix printers."

Marguerite Reardon co-wrote this article.

There will be plenty of hullabaloo on Tuesday when T-Mobile unveils the first phone powered by Google's Android operating system. But the event is only the beginning of a long effort to rewrite the rules of the mobile communications industry.

The phone, a somewhat chunky model called Dream built by HTC, is expected to cost about $200 from T-Mobile and go on sale in October. Until other partners in the Google-spawned, 34-member Open Handset Alliance bring their Android products to market, this small piece of electronics will shoulder a lot of ambitions.

For T-Mobile, an Android phone could bring some Google buzz to the scrappy carrier, helping match what AT&T got from Apple's iPhone. It also could potentially persuade customers T-Mobile's new 3G network is worth paying give T-Mobile new revenue from online application sales.

For Google, Android is a tool to spread Internet-savvy phones far and wide. People with powerful networked phones use the Internet much more, and Google wants to be the top company supplying the information they demand online.

"Look at Japan, (where) we have far more usage of mobile Web. It's similar with the iPhone," said Google co-founder Sergey Brin in a meeting with reporters last week. "If the Internet is widely available, that's good for us."

What's not yet clear is how well Android phones will fare in the marketplace. Google's software is untested, and there are plenty of competitors in the mobile phone market.

But Google's advertising business is a money factory, and the company has shown it has patience to invest that money in key projects. So even if the first-generation Android phones don't entice people to line up around the block, competitors who develop mainstream phone operating systems such as Nokia's Symbian and Microsoft's Windows Mobile doubtless are taking heed.

New rules
Android is an attempt to bring some of the ways of the computing industry to the mobile phone world.

For example, taking a page from Microsoft's playbook, Google is trying to enlist countless programmers in its Android charge, relying on them to build applications for the phone. While the mobile phone business hasn't made it easy to add new applications to phones, Google wants to reverse this and bring more of the openness of PCs to the phone market.

"If you're going to be an Open Handset Alliance carrier, you can't lock it down," said John Bruggeman, chief marketing officer at Wind River Systems, a Google ally that helps phone makers build and customize Android for their phone hardware.

Open-source software is another example. The Android software, millions of lines of code that will become open-source software with the release of the first phone, employs some components familiar to the computing industry and some new ones. It employs Linux at its lowest levels to communicate with hardware, but applications running on the system are written in the Java programming language. Java is common in mobile phones, but Google diverged from the mainstream phone industry by creating its own Java foundation, called Dalvik, for running the programs.

Because much of Android is open-source software, it can be used for free, and that means those selling phones can spend their money on better hardware rather than on software license fees, Bruggeman said. In addition, other individual programmers or interested companies can help improve that open-source software, so at least theoretically Android could become an exercise in collective engineering the way Linux has been.

Wind River is contributing code of its own as part of its Android support business. Its customers' second-generation Android phones will ship in the first half of 2009, Bruggeman said, and "There's a good chance we'll make first quarter." He called the Dream a good start, but promised better power management, performance, usability, and features for the sequels.

Running the gamut
Android can be used by any phone manufacturer to build any kind of mobile phone--anything from a simple, inexpensive phone for the developing world to a power user's high-end smartphone.

Andy Rubin, head of Google's Android project.

(Credit: Stephen Shankland/CNET News.com)

HTC and T-Mobile seem to have gone the smartphone route in developing the Dream, which some are calling G1. So far, neither T-Mobile nor HTC has revealed details about the new phone. But rumored specifications for the device and pictures on various blogs suggest it's chock-full of bells and whistles to help it compete in the smartphone market against devices like Apple's iPhone and Research in Motion's BlackBerry devices.

Some of the features that are rumored to be included are a full QWERTY keyboard, 3G support as well as Wi-Fi, a full HTML browser, embedded GPS, easy access to Google applications such as maps, YouTube, instant messaging, e-mail, SMS texting, a 3-megapixel camera, a music player, video recorder and player, and a memory card slot.

The Dream's $200 price tag also hits the smartphone sweet spot for cost. T-Mobile is already selling both the BlackBerry 8820 and BlackBerry Curve for $199 with a two-year contract. And Apple and AT&T are offering the iPhone 3G for $200 with a two-year contract.

T-Mobile already has a decent portfolio of smartphones, including the BlackBerry Pearl, BlackBerry Curve, and BlackBerry 8820. It also sells two other HTC smartphones that use Microsoft Windows Mobile operating system, the T-Mobile Dash and T-Mobile Wing. But as the carrier rolls out its new 3G network, it needs a flagship device that will give consumers, who might be tempted to buy an iPhone for AT&T's network, a reason to buy a phone on T-Mobile's network.

High hopes
But the big question is whether the Dream can live up to expectations.

The iPhone set the bar for what customers should expect from a smartphone. Apple then raised the bar this summer with the iPhone 3G and a new App Store that allows people to buy and download thousands of applications.

Since the iPhone was first launched in 2007 exclusively on AT&T's network, wireless operators have been scrambling to find a cool device to compete. Last year, Verizon Wireless introduced the LG Voyager, which has a touch screen that flips up to expose a QWERTY keypad. Earlier this year, in anticipation of an iPhone with 3G, Verizon launched the LG Dare, a 3G touch-screen phone with a mobile browser.

In June, just a few weeks before the iPhone 3G went on sale, Sprint Nextel launched the Samsung Instinct, a touch-screen 3G smartphone designed to give iPhone a run for its money.

The HTC Dream is T-Mobile's iPhone slayer, or so the company hopes. Because the software has been developed by glamorous Google there are a lot of expectations. And some believe that Android could also be a game-changer, just like the iPhone before it.

Like Apple, Google plans a central site to distribute and sell applications. In August, it announced plans for the Android Market, an online center where people can find, buy, download, and rate applications and other content for Android phones. Initially, the site will only support distribution for free applications. An update later will handle different versions of applications, support different profiles of Android phones, and include analytics to help developers track adoption, Google has said.

Bruggeman, though, doesn't see Google's crosshairs painted on Apple's back.

"I don't think it's an iPhone killer. As long as Apple continues to innovate and create a good user experiences and sexy devices, there's always a place for that," Bruggeman said. "If the mobile phone market is 3 billion units and Apple has 15 million, they are a pimple on the mobile phone landscape. There will always be a room for a pimple on the landscape. Google is playing for the rest of the enchilada."

This post was co-written by staff writer Marguerite Reardon.