From what I've heard, the G1 took three years to develop. That explains why the G1's design looks so dated compared to the latest HTC devices. As HTC gets more experience with Android, I'm certain that we'll see more compelling devices.
I agree that it's too early to judge Google's mobile operating system. There are a lot of companies out there who have committed to Android. Even if half don't make it to release, the marketplace is still going to be awash with Android handsets. Momentum usually builds slowly.
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T-Mobile however severely limited the availability of the T-Mobile G1 during the initial launch to only markets that were running their newly installed HSDPA towers, which meant that it was released in only 21 markets.
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The G1 was also launched in most of Europe. Please don't fall into the trap of viewing smartphones as a purely American thing. Most smartphones are still sold outside of North America. The Nokia N73 sold 22 million units without ever reaching American shores.