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As an Android phone the T-Mobile G1 promises to be the most open telephone platform in the United States, perhaps with the exception of the OpenMoko phone I've read about. But as a phone backed by a major cell carrier the G1 has a chance to have a noticeable effect on the mobile data space. Based on Engadget's coverage of the launch here are my impressions broken down as a brief set of pro's and con's.

I'll go with the good news first, then the not-so-good news.

+/- $179 2-year-contract G1.
+ $399 contract-free G1
+ Tethering allowed, but monitored.
+ Amazon music store integration.
+/- Data plans had 1GB limit, under review.
- Data plans are a bit much: $25 for 400 msg, $35 for unlimited.
- No headphone jack, must use proprietary dongle instead to connect headset.

Pricing
The contract-free G1 compares very favorably to Windows Mobile phones and extremely favorably to Blackberry phones. T-Mobile being in favor of unlocking the phone after 90 days is also surprising. The 2-year contract price is cheaper than Windows Mobile phones but not Blackberry phones. To shake up the market I would have liked to see the G1 come in even farther below the iPhone.

Data Plans
T-Mobile initially announced a 1GB soft cap and have since backtracked, citing that terms are still being worked on:

"we reserve the right to temporarily reduce data throughput for a small fraction of our customers who have excessive or disproportionate usage that interferes with our network performance or our ability to provide quality service to all of our customers"

This is a positive step in response to significant user backlash, but probably means there will be an unpublicized soft cap that will be sussed out the same way the soft caps were on the other carriers this year -- users will slam headlong into them, write about it online, and eventually through multiple cases find out what the policy is and publicize it.

The base data plans aren't so bad up against competing carriers but cheaper would still be better to get the market share jumpstarted.

Tethering
Tethering is not available out of the box but a third party app could allow it. While third party applications won't be banned or controlled as they are on Apple's device and while you won't get thrown off the network for using a tethering application, you can get thrown off the network if use of it impacts the service too negatively. That's a little gray, but for light use of tethering as most people might want (to avoid the data cap) it sounds good to me.

With the Bluetooth API dropped from Android 1.0 we might see third-party applications turning the G1 into a WiFi ad-hoc access point to let a regular WiFi device like a laptop with Exchange support connect up to the T-Mobile data network.

Proprietary Dongles and Amazon Music Store Integration
Proprietary dongles to connect up headphones or charge the device is such a backwards thing to do in today's USB-friendly marketplace. Now if the sound output on this device isn't much good -- my Nokia N800 tablet sounds pretty poor with regular headphones -- I won't miss it and the Amazon integration is less important to me.

The Next Android Phone
If a CDMA Android phone is in the works I'd expect Sprint to carry it and hopefully match T-Mobile's pricing on data plans to kickstart the market. They're in dire straits these days, and while I've read that T-Mobile is struggling to grow in the shadow of AT&T and Verizon's domination they're not hemorrhaging members the way Sprint is. If Sprint gets some consumer-friendly pricing on the table with a successful Android Marketplace, the Android phones could be what puts it back in the game, especially given Verizon's outspoken resistance to open handsets and its so-far-lip only-lip-service stance on allowing outside devices onto its network.

On the GSM side T-Mobile is really it in the US with AT&T married to the iPhone, and the format's worldwide acceptance makes me think that a CDMA Android phone might not appear soon.

Chance of Success
I'll be paying very close attention to the reviews of the G1 as it hits the market in late October to see if the applications are polished enough and the phone performs well not just as a phone but as an on-the-go data device. Following that I will be paying close attention to the Android Marketplace and the diversity and level of polish of those applications.

The phone itself has to be solid and reliable and only then can Android play its most powerful card in the form of the open source development community. If the AM doesn't take off buyers won't come to it as an alternative to the market-devouring iPhone.

For sources: Unlocking and Tethering, the cap, and the friendly backtrack from the cap.