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Week in review: Google enters the cell phone business

The unveiling of the first phone with Google's Android operating system made the most noise this week, but news about music services played loudly in the background.

Now playing: Watch this: T-Mobile launches G1, first Google Android phone

The unveiling of the first cell phone with Google's Android operating system made the most noise this week. But news about new and improved online music services also played loudly in the background (as did the ongoing U.S. economic crisis).

T-Mobile USA and Google on Tuesday unveiled the first phone powered by Google's open platform to much New York fanfare. The phone, previously code-named the HTC Dream, is now called the T-Mobile G1. It goes on sale in the U.S. on T-Mobile's network starting October 22 for $179 with a two-year service contract.

T-Mobile USA's parent company Deutsche Telekom will also be selling the device starting in November in the United Kingdom through its T-Mobile service. And the phone will be available throughout the rest of Europe via T-Mobile starting in the first quarter of 2009.

By most accounts, the G1, from a hardware perspective isn't a game changer. The device, which has a full QWERTY keyboard that slides out from a touch-screen exterior, looks similar to other devices on the market, such as the T-Mobile Sidekick or Verizon's LG Voyager.

T-Mobile G1 gallery

But inside, the Google Android software offers an improved mobile Web experience, making it a viable rival to Apple's popular iPhone (click here for comparisons between the iPhone and the G1) and a winner over other smartphones. Of course, until other partners in the Google-spawned, 34-member Open Handset Alliance bring their Android products to market, the G1 is shouldering a lot of ambitions.

Incidentally, Google has since released the software developer kit that will allow programmers to create applications that will run on Android phones. Click here for more details on the G1's offerings, or here for a roundup of all of the week's Android news.

The music plays
One feature in the G1 that got a bit overshadowed in the launch hype is the inclusion of Amazon.com's DRM-free MP3 store, which comes preloaded on each Android phone. That's bound to catch on once users start to realize that--unlike with iTunes--you can put songs downloaded from the store on any mobile device.

Also big news for online music aficionados this week was MySpace's much-anticipated debut of MySpace Music, which many see as the official stand-off between media mogul Rupert Murdoch and Apple CEO Steve Jobs.

MySpace Music, backed by all four of the largest recording companies, represents the most significant challenge to Apple--at least in terms of firepower--in some time. This is the first time the top labels have all joined in taking a stake in an iTunes competitor.

As with the Android phone, MySpace Music songs come from Amazon in the DRM-free MP3 format.

But among the many challenges the service faces is that it offers no hardware solution. Apple can provide everything a music listener needs--hardware and software. Also, while MySpace has long been an Internet concert hall, where bands went to market their wares to the Web, neither MySpace nor its owner News Corp. have much experience in music retail; consider that Apple has zoomed past Wal-Mart to music retail's top spot. Some critics have said that something like MySpace Music should have been in place on the site years ago.

Also in music news this week, mobile phone company Sony Ericsson announced Tuesday that it will launch a music service called PlayNow Plus, which will feature unlimited music downloads, also from all four of the major labels.

PlayNow Plus will compete with Comes with Music, the music service launched by Sony Ericsson rival Nokia earlier this year. And out of the gate, PlayNow can offer a more complete music library than Nokia's offering. EMI has yet to join Comes with Music.

Later in the week we also learned that Universal Music Group, the largest of the major recording companies, plans to launch a "Hulu-like" video portal.

The new venture would offer professionally produced music videos as well as other original programming that features the label's artists. The Killers, Mariah Carey, Kanye West, and Amy Winehouse are just a few of the company's acts.

The effort, sources say, allows the the label to squeeze more revenue out of music videos and offer artists a new and more polished platform to display their talents than what's available online now. And it could help draw larger numbers of premium advertisers to music videos. Right now, YouTube has become the most prominent online venue for music videos, and all four of the major labels have licensed music to the video-sharing site; YouTube's troubles at attracting top-tier advertisers are well chronicled.

And for those with an eye for indies, Muxtape founder Justin Ouelette this week explained that the bureaucracy of the music industry was just too much for him to deal with, which is why he took down the playlist creation Web site that became a hipster craze earlier this year. The site will be relaunching soon, he said, but strictly as a service for independent bands to share their own music.

Also of note
Microsoft's Windows 7 won't include built-in programsfor e-mail, photo editing, and movie making...Social news site Digg has raised $28.7 million in a Series C venture round...Mad Men star joined company executives in the launch of the "APT by Yahoo" ad platform...Oracle entered the hardware market with a storage server to ride shotgun with database intelligence...and Microsoft has had to delay Windows Mobile 7, a much anticipated update to its cell phone operating system.