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Here’s a cursory feature comparison between Apple iPhone 3G and the new T-Mobile G1 powered by Google Android:

Feature Apple iPhone T-Mobile G1
Keyboard On screen Full QWERTY slide-out keyboard
Connectivity 3G, WiFi, Tri band GSM, UMTS, Bluetooth 3G, WiFi, Quad band GSM, Dual band UMTS, Bluetooth
Messaging Email, Instant messaging, Microsoft Exchange support Email, Instant messaging, Special GMail push support, Multimedia messaging, multi-tasking while messaging
GPS and other services Assisted GPS GPS, Google Maps, Google Maps Street View with compass mode
Media store Apple iTunes music store Amazon MP3 store
Camera 2 mp 3.1 mp
Dimensions (HxWxD) 4.5 x 2.4 x 0.48 in 4.6 x 2.16 x 0.63 in
Weight 4.7 ounces 5.6 ounces
Storage 8/16 GB Expandable up to 8GB
Screen resolution 480 x 320 163 ppi 480 x 320 65K color screen
Talk time 5 hour talk time, 300 hour standby time 5 hour talk time, 130 hour standby time
Application support Apple App Store Google Android Market
Voice dialling No Yes
Removable battery No Yes
Copy & Paste support No Yes

As seen from the above comparison, the phones stack up pretty well against each other. In connectivity, messaging, GPS and the camera, the T-Mobile G1 has an edge over the iPhone. Some would argue that having a full QWERTY keyboard is also a major feature. So we can consider the T-Mobile G1 better in that area too. In the others the iPhone is pretty good. The overall user experience should be better with the G1 because of certain features like copy & paste, etc. Also the fact that the G1 has a removable battery makes a big difference.

If T-Mobile can provide service and coverage at par with AT&T, the G1 does have the goods to give the iPhone a run for its money.