Android Will Kill the iPhone and Cripple AT&T - Eventually

T-Mobile and Google announced the Android-loaded, HTC-manufactured G1 phone this morning to an enthusiastic crowd, waiting to be awestruck. At first glance, the G1 looks to be on very even ground with the iPhone. But look a little deeper and the potential divide is colossal.

At first, you see a touch-screen phone. The physical specs are about the same. The G1 has a slightly smaller screen, is a bit thicker and weighs about an ounce more, at 5.7 ounces, but also features a higher resolution camera. But the first big difference you see is the slide-out keyboard on the G1. This should be a big hit - it's ease of use in in sharp contrast to the awkward experience of iPhone's touch-screen keyboard.

Devlelopers:

The iPhone has apps developed by third parties, and so does G1's Android. But there is a crucial difference. While iPhone - and AT&T - are locked into one system, Android has plans to open up to all developers, across a multitude of networks, platforms and providers.

"We really believe that 'open' is going to drive the future of the mobile Internet," said T-Mobile USA's chief technology and innovation officer, Cole Brodman at the G1 unveiling. "From garages to graduate schools, from small towns to big cities, we believe third parties ... along with partnerships with carriers will drive the mobile Internet."

This "openness" is a big threat to Apple. By opening up such a marketplace, you can bet that developers will seize the opportunity to spread their apps to a larger national and global audience. What this will do is attract the best, most diversified developers to Android and leave a smaller, more niche group of developers for Apple - further alienating a suddenly isolated community. It makes me think of the latest Microsoft commercials in relation to Mac - Macs are for young, college-aged kids, while PCs are for everybody.

Manufacturers and Carriers:

There is one market for iPhone and its applications - Apple and AT&T. Android has the potential to reach all kinds of audiences on various networks. And, depending on how things unfold, on any number of devices. It's not crazy to think that you could see a slimmed-down version of Android on a phone that a carrier could offer for under $100. Perhaps even a free phone loaded with Android with a two-year contract? Why not?

As far as manufacturers are concerned, they don't need specialized software developers anymore. Android gives them everything they need - resulting in a lower overhead and more money for shiny new devices and bigger marketing budgets. Also, there are about one billion mobile devices introduced into the market every year. Should even a relatively small percentage of these be available to Android, that number would dwarf the iPhone's market share.

Google and the Consumer:

To begin, the G1 is priced at $179 with a two-year contract, quite attractive. Data packages are $25 for unlimited mobile Web and limited messaging, $35 for unlimited Web and unlimited messaging - something not currently available with the iPhone. Both packages require a voice plan.

Android will, of course, feature the full suite of Google products. This effectively integrates search, calendars, gmail, chat, Google reader, iGoogle, Maps (complete with street view and a built-in compass) ... you name it, the G1 will be able to use it. Instead of separate applications, consumers will literally be able to coordinate their entire lives in one device, on one system. Android will also handle Microsoft Word documents, Excel, pdf documents and more. There's also Google's Grand Central, the communication medium designed to coordinate all of your phones, voicemails, etc. That's been on the back burner for a while, perhaps not for much longer. Finally, well, its Google. Who is AT&T partnered with? Yahoo. And we're all seeing how well that's going.

Perhaps the biggest difference between the two devices, and the most important was summed up by Google co-founder Larry Page when he said, "This is as good a computer as you had a few years ago ... as a phone." And that's an important distinction. Whereas Apple's iPhone has been marketed as a Web-enabled phone, the G1 is being marketed as a full-on computer. And in case there was any confusion between the two, Google's other co-founder Sergey Brin demonstrated his new favorite Android app. He tossed the phone in the air, saying that the app meausured the time between when the phone was tossed and when it landed - slyly demontsrating the accelerometer, the "fun" side of Android and effectively saying, this phone is every bit as good as the iPhone ... but better.

Some Challenges:

Of course, it's not as if Apple, the iPhone and AT&T are going to just disappear. The G1 and Android have a few challenges to face.

• No iTunes. Consumers have invested so much in iTunes, they won't be eager to leave. Android will use Amazon's mp3 store. One of the goals of a mobile device is to eliminate the need for more than one device. If you want your iTunes, you're going to need an iPod too. That said, DRM-free music unlocked by the user would work.
• Battery life. Unfortunately the G1 didn't address a major problem with the iPhone. In fact, all indications are that the G1 has less battery life, at least in standby mode.
• No video camera. All I'm going to say is that, again, an opportunity missed.
• Time. Apple has a big head start.
• Steve Jobs.

Visit T-Mobile's website to see the G1 in action.