US mobile carrier T-Mobile is expected to announce the first phone based on Google's Android mobile operating system on 23 September, with the so-called 'Dream' phone from HTC to go on sale sometime in October.

(Credit: Google)

The Wall Street Journal reported this week that sources close to the manufacturer said HTC was forecasting that it would ship 600,000 to 700,000 Android phones by the end of the year. This is much higher than the 300,000 to 500,000 phones analysts have predicted the company will sell.

Neither HTC nor T-Mobile would comment on the story, The Wall Street Journal reported.

The phone, which will be the first to use Google's open source Android operating system, has been hyped for months. Blogs and traditional news outlets have been reporting every rumour and leak about the device, which is expected to go head-to-head with Apple's iPhone and Research In Motion's BlackBerry smartphones.

The phone is expected to be packed full of bells and whistles that combine those found in the iPhone with some found in a BlackBerry. For example, it has a large touch screen like the iPhone. But it also has a swivel-out QWERTY keypad and trackball for navigation similar to the BlackBerry.

Android, which is built on an open source platform, could offer developers an easier way to develop new applications than Apple's iPhone. But the fact that Android will be used on hundreds of different handsets might complicate application development and distribution.

iPhone developers only have to worry about one piece of hardware, which makes it easier to develop more robust applications. But this will not be the case with Android, which can be used by any phone manufacturer.

Google hasn't officially announced an Android application store, but Andy Rubin, Android's project leader, suggested during a Google developer conference in San Francisco in May that an Android App Store was on the way, The Register reported at the time.

"It would be a great benefit to the Android community to provide a place where people can go to safely and securely download content and where a billing system would allow developers to get paid for their effort," the article quoted him as saying."We wouldn't have done our job if we didn't provide something that helps developers get distribution."

Android is also supposed to have tighter integration with many Google applications.