Google-Branded Phone With T-Mobile Contract Could Arrive In January

According to a source familiar with the matter, Google is planning to offer two versions of a rumored self-branded cell phone. One version will be available directly through Google as an unlocked device. The other will come with a service contract through T-Mobile USA. The phone, which is manufactured by HTC, could be available directly through the Google website as early as January 5 according to the source.

Although few details about the phone are actually available, a number of code names have been thrown around including HTC Passion, Dream, or Nexus One. Google hasn't said much about the phone, but did confirm via a blog post that it was testing a new mobile device with its employees.

The phone is similar to the ever-popular Apple iPhone, but offers a number of features that set it apart, including an exchangeable battery, a slightly larger screen, and the ability for customers to add memory to the device.

The T-Mobile version of the upcoming phone will be subsidized by the carrier, assuming the customer agrees to a service contract. "In the long term Google will become a seller and get commission from operators," the source said, adding that other operators are expected to follow T-Mobile and agree to Google's terms. Just as Apple has done with the iPhone, it's expected that any operator who wants to make the Google phone available to its customers will have to go through the search giant.

Until now, Google has partnered with handset manufacturers to offer its open-source Android software for smartphones. More than a dozen phones are currently available with Android, including the Motorola Droid which launched with Verizon Wireless last month.