In the 15 months since it introduced the first iPhone, Apple (AAPL) has radically changed our expectations for mobile phones. But the rest of the industry isn't standing still. We're likely to see a fresh round of innovation as T-Mobile (DT) rolls out the first handset based on Google's (GOOG) Android operating system. And Research In Motion (RIMM) is fiercely defending its mobile e-mail turf with very good new products. Of the two, outsider Google faces the tougher challenge. But based on a preliminary look at the T-Mobile G1, announced on Sept. 23, launching in the U.S. and Europe in late October, I'd say it has a shot.

Apple set this whole competition in motion by building a single, excellent phone within an ecosystem that it controls totally, including the right to approve all third-party software. In contrast, Google is pushing an open platform, meaning any handset manufacturer can design hardware that runs Android. The closest relative to Android is Windows Mobile, which remains awkward to use after a decade of tweaking by Microsoft (MSFT).

I spent only about an hour with the G1 ($180 with two-year contract; unlimited data plans start at $25), which is co-branded by Google and handset maker HTC. Disappointingly, the phone is a bit thick and heavy. The screen slides up to reveal a keyboard, but the way the keys are recessed between raised areas on either side makes for slightly uncomfortable typing. And while the big touchscreen is nice, you can't resize objects simply by pinching or stretching them with your fingers. Once you get used to this trick on the iPhone, you expect it on every handset.

The Android software is far more interesting than the G1 hardware, in part because the developers tried to tear down the walls that divide applications. Other mobile-phone operating systems get you only some of the way to this goal. On a Windows Mobile handset or an iPhone, if you click on a Web address in an e-mail message, the phone opens a Web page in a browser. Click on a phone number in a Web page, and the phone usually dials it. But a task as simple as copying text from a Web page and pasting it into an e-mail is difficult to impossible on handsets.

Android tries to fix this by organizing activities in terms of users' needs and desires rather than predetermined programs. In a sense you are always in a browser, even when it doesn't look like it. Not surprisingly for a product designed by Google, search is central: If you start typing while browsing the Web or looking at a picture, Android will search the phone contents and the Web based on the text. This instant search could prove to be either extremely helpful or really annoying. I will explore it in a more detailed review of the G1 closer to its launch. One problem with the initial Android release is its Google-centricity. The search, of course, is Google search, and e-mail is optimized for Google's Gmail. The phone pulls contacts from Google Contacts, so you'll need to jump through hoops to keep the phone's contact list in sync with Outlook or the Mac Address Book.

Another problem: The G1 is a data-hungry phone that will mostly be stuck on slow networks. T-Mobile is just starting up its 3G data service, and it will be available in only 21 cities.

If Android is a work in progress, BlackBerry is a mature product that knows what it wants to be and keeps getting better. RIM has expanded its growing consumer line with the T-Mobile Pearl Flip and will soon announce its first touchscreen product, the Storm, with Verizon (VZ). And it has strengthened its appeal to the BlackBerry's core corporate market with the Bold.

For reasons that are unclear, AT&T (T) is holding the Bold off the U.S. market, but I was able to test an unlocked Canadian version ($759) courtesy of PureMobile, on the AT&T network. It is quite simply the best BlackBerry ever. It's bigger than a Curve and feels a bit bulky after the mini-phones I have been using, but it exploits its scale to great advantage, with an excellent keyboard, a big, sharp display, and plenty of battery power to get through a long day.

RIM has redesigned the user interface to take advantage of the big screen, but not so drastically that it will feel alien to BlackBerry users. With an improved Web browser, the phone moves seamlessly between AT&T's 3G service and Wi-Fi. It's expected to cost around $400 with a contract, and I hope AT&T offers it soon. If e-mail is your thing, this BlackBerry is worth waiting for.

The turmoil created by the iPhone is leading to major innovations such as Android and solid evolutionary products like the Bold. Consumers are reaping the benefits.

Source:businessweek