The new phone powered by Google is set to launch tomorrow, ready to face off against Apple’s iPhone in the run up to Christmas.

The long-awaited smart phone, called “G1”, will be manufactured by Taiwanese manufacturer HTC and will be available exclusively on T-Mobile in the UK.

The mobile, already dubbed the “G-phone,” will run on Android, Google’s new software for mobile phones. It will be launched in New York tomorrow afternoon, and will be available in the US next month. It is anticipated that the phone will be available in British stores by November.

The G1 is expected to cost about $199 (£108), which would be around the same cost as basic 8GB version of the iPhone.

Google, notoriously secretive about any of its new technology, is refusing to comment on the phone before its launch. But leaked photos and videos of the expected device, along with screenshots released by the search giant, show that the device is likely to have a touchscreen like the iPhone but also a slide-out Qwerty keyboard.

The phone is expected to have as built-in GPS (global positioning system), a tilt sensor for gaming, and a camera. It is thought it will be able to run Google's range of web applications, including Gmail, Google Docs and Google Maps, and will likely also feature Google's new web browser, Chrome.

The arrival of the first G-phone is the opening round in the battle to create and control the software that will run the next generation of mobile phone that will be able to access the Internet.

At a conference last week, a senior Google executive pointed out that there are more phones than people being used in the UK, and this represented a massive opportunity for the company. Google’s new operating system for mobile, Android, is expected to put Google’s new browser at the forefront of the G-phones, enabling the internet giant to tap into this audience.

Google also hope to take the lead over Apple, by making Android “open source” – meaning that no-one will be charged to use it on their handset or for writing applications for it. This means that anyone can write programs that will run on an Andriod-powered phone.

So far, these free application include “BreadCrumbz”, a GPS style navigation system that not only give a drawing of your route, but also includes real-world photos of your surroundings to keep you from getting lost. Another application is “TuneWiki”, a karaoke player for mobiles which synchronizing written lyrics to a song's YouTube video.

Developers have already been creating applications for the iPod and iPhone, with users of Apple’s devices downloading the 3000 applications available through iTunes over 100m times since they were available in July this year.

However, Apple controls what applications are available to users, as they must be downloaded through the iTunes store. Applications for Android phones will be available to be downloaded from anywhere. Google believes this is a more democratic system but critics say Apple’s system allows it to exercise quality control.

The handset manufacturer, HTC, said they expect better sales for Dream than most analyst estimates.

A source close to the launch was reported as saying that the company expects to ship 600,000 to 700,000 units of the new phone this year, whereas analysts have put the figure at 300,000 to 500,000 units

There are more Android powered phones set for launch next year, with manufacturers LG and Samsung set to unveil their first mobile phones that run on Google’s new software next year.

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