The New York Times said Thursday that the phone, being made by HTC, is expected to go on sale as early as October, in order to make the holiday season. It cited unnamed sources who had been briefed on T-Mobile's plans.

Touchscreen, Keyboard

The new device using the open-source Android software stack will reportedly have smartphone capabilities that compare with the Apple iPhone and devices from Research in Motion, Nokia and others.

The HTC phone is expected to have a touchscreen that slides out to reveal a full keyboard. A video purportedly showing the Android device is now on YouTube. Even if development is completed, the phone must still be certified by the Federal Communications Commission before it can be released.

The expected launch of an Android-based phone is attracting a lot of attention for several reasons.

First, it is based on the Google-backed platform, and Google, like Apple, is a powerful brand name with a major following.

Second, Android offers the possibility of a mobile environment driven from the ground up, rather than the familiar top-down offerings of major phone companies. The Linux-based operating system is freely available and backed by an alliance of carriers and manufacturers. Android phones will be able to run applications developed by third-party developers, a potentially dynamic ecosystem like the iPhone's.

An Android-based phone would also arrive as open-device/open-software networks are emerging in the U.S. In the FCC auction of 700-MHz bandwidth earlier this year, Verizon Wireless won the licenses to the C block along with an obligation to allow any compatible device or non-malicious software to work on the frequencies. This, along with the possibility of other open networks, could mean that Android becomes a major part of a new mix-and-match mobile environment.

'Compete on Their Merits'

Avi Greengart, an analyst with industry research firm Current Analysis, said the T-Mobile Android phone "could be competitive," but the phones "will have to compete on their merits."

He added that the most recent build of an Android phone that he saw "was quite impressive, with rather spectacular map applications." Greengart also noted that Google's name and the potential availability of a large number of third-party applications are strong setuups for the device -- but in the marketplace it will have to stand up against devices that have installed bases and track records.

The report of a fall release for the HTC phone comes only days after a report of problems with integrating Android into devices -- a problem that, if true, could delay the release of such a device until next year. Late last week, analyst Trip Chowdhry of Global Equities Research was quoted as saying that HTC was having "structural problems" incorporating Google's feature set.

HTC, however, said its release schedule for an Android-based phone remained on track, as did Google. Originally, Google had said the first phones would be released in the second half of this year and, most recently, the expectation had been for a launch in the fourth quarter.