SHIFT: Android — iPhone killer after all?

At my poker game last week, I was showing off the T-Mobile G1 Android phone. While fondling it, one of my opponent friends asked me, "Are all cellphones going to be touchscreen?" Without hesitating (or thinking) I said, "Yes," which is, of course, a stupid answer.

My initial gut reaction and ultimately nonsensical conclusion was stoked by having played with the first Android phone, the T-Mobile G1, for the last couple of weeks. My first impressions were, one, great operating system, two, bad phone, three, bad network. T-Mobile and HTC, which makes the G1, also missed some major opportunities to surpass the iPhone.

As such, as I opined last month, the G1 is not going to be an iPhone killer, which was the unspoken next question by my opponent friend. I stand by this opinion. The iPhone's dominance will not be threatened by the G1. But it will be threatened and overwhelmed by other Android phones. Click continue to see why.

Now that I've had some time to play and appreciate Android, it's obvious that the G1 is the wrong ship and T-Mobile the wrong ocean for Google to challenge Apple. In fact, future Android phones won't even need a touchscreen to beat iPhone.

It's the OS, Stupid
Unlike iPhone (the OS, not the phone), Android is flexibly designed to run on both touchscreen and non-touchscreen cellphones. All Android phones have to have Home, Menu and Back buttons and some sort of navigation control, which means less work to adapt Android to existing phone designs.

Since Android doesn't need to be touched, it's likely to show up on so-called "feature" phones. That means a lot more phones running Android vs. Apple's single iPhone model. Not right away, of course, but I'll bet we'll see a non-touch Android phone by the end of next year.

No single Android phone is likely to sell as well as iPhone. But it's quite likely that all phones running Android could surpass iPhone in sales. To warm the cockles of Eric Schmidt's heart, however, there need to be a lot more Android phones.

Android Carrier No. 2?
The G1 has been on sale for less than two weeks. That means it's time to start speculating about the next Android phone. So from which carrier will it come?

Sprint CEO Dan Hessen's recent curmudgeonly anti-Android remarks may seem to contradict reports that Sprint will be the second carrier with an Android phone. But Hesse is no doubt defending a potential sales hit to the carrier's Instinct iPhone alternative should Sprint's true Android intentions be revealed too soon.

But in the same breath, Hesse admits Sprint would have an Android phone next year. Smart money says sooner rather than later. A Sprint Android phone would be far more successful than the G1. For one thing, Sprint has more customers — and more customers interested in higher-end phones — than T-Mobile does. Sprint's 3G network is also far more ubiquitous now than T-Mobile's will be even a year from now. On top of that, Sprint also is likely to learn from G1's drawbacks when dictating design of its Android device.

Android Phone No. 2?
So who will make Sprint's Android phone, and what will it look like?

My guess: It'll be made by HTC and it will look like HTC's TouchHD. HTC has forged a strong relationship with Google with the G1. Sprint has a solid relationship with HTC as well. So, I'm going to go out on a limb and say Sprint's first Android phone will come from HTC.

HTC obviously will have learned from the G1's shortcomings. To compete with iPhone, HTC is going to not only apply some lipstick on the G1 pig, but boost its functionality as well. The TouchHD has everything the G1 lacks and some things the iPhone lacks. The TouchHD has a 3.8-inch screen, .3 inches larger than the iPhone. It has a 5-megapixel camera vs. iPhone's 2MP and the G1's 3MP imager. The TouchHD has video recording, infamously missing from iPhone and the G1. It has Wi-Fi, missing on a feature shared by the G1. It's also the first HTC phone with a 3.5mm headphone jack, unconscionably missing from the G1. The TouchHD, however, is missing a QWERTY keyboard. But the G1's QWERTY is awkward to use, so maybe a QWERTY-less Android phone isn't a bad thing.

Even if Sprint's Android phone doesn't come from HTC and doesn't resemble the TouchHD, you can be sure it'll improve on the G1 and include many of the aforementioned attributes. Technology marches on.

Economies of Android Scale
But it's not only about added functionality and aesthetics. In order for Android phones, touchscreen or not, to be dominant, they have to be priced right.

Following the usual gadget evolution and economies of scale, touchscreen phones will soon reach near price parity with non-touchscreen phones. Wal-Mart just got the ball rolling by discounting the G1 by $30, selling it for $148.88. There are rumors that Apple will slash the iPhone to $99 (there are also rumors that Apple is readying a 32 GB iPhone for the spring that could maintain the $199 price tag).

So imagine shopping for a phone a year from now. iPhone, Android phones are exactly the same price as suddenly antiquated non-touchscreen flip, slider and candybar models. Which would you buy?

Hmmm. Maybe my gut instinct about all phones being touchscreen one day isn't so off after all.

CORRECTION: The original version of this post erroneously said the G1 doesn't have Wi-Fi. In truth, it does feature the wireless technology. DVICE apologizes for the mistake.