Google unveils its G1 cellphone, potential rival to Apple's iPhone

When it starts selling in U.S. stores Oct. 22, the $179 G1 from HTC Corp. will be the first of many expected gadgets, from a wide variety of manufacturers, that run Google's new Android mobile operating system and have many of the Internet giant's services built in.

The G1, which works on the T-Mobile USA network, marks another salvo in the intensifying cellphone wars as tech titans try to upend the wireless market and seize a major business opportunity.

The likes of Google, Apple and Microsoft Corp. are betting they can make billions by selling software and delivering ads for the new generation of increasingly powerful mobile devices.

"The cellphone is the world's most popular device, and it is going to be the world's most popular way to access the Web," said Ross Rubin, an analyst at NPD Group.

For the tech giants, staking a claim on the mobile Web is vital. Cellphones outnumber personal computers roughly 3 to 1.

When it comes to connecting people to the Web, phones are still far behind computers. But the iPhone, BlackBerry and other so-called smart phones are changing that. Research firm IDC predicts that by 2012, more mobile devices than computers will be used in surfing the Web.

These gadgets could be lucrative vehicles for advertising, particularly ads that alert phone users to shops and services near their precise locations.

Google executives predict the company will eventually make more money on the mobile Web than on the traditional Web. Investment bank Collins Stewart says it expects the search giant to add $5 billion in revenue from cellphone ads by 2011.

The G1 connects to Wi-Fi hot spots, features a keyboard and trackball and even has a compass, so when a user looking at Google Maps turns, the image does too.

But analysts say HTC and T-Mobile lack the marketing firepower to conquer the smart-phone market. The BlackBerry, made by Research in Motion Ltd. and supported by all the major wireless carriers, dominates the corporate side of the market, while Apple's iPhone, which runs on the No. 1 AT&T network, is a consumer hit.