Wal-Mart To Sell Discounted G1Wal-Mart To Sell Discounted G1

T-Mobile's Android-powered G1 handset just got a powerful retail ally as Wal-Mart said it will sell the smartphone in 550 stores starting Wednesday.

Customers who buy the handset from Wal-Mart will also get a discount, as the retail giant will be selling it for $148.88 for new customers who sign up for a two-year contract. Google, HTC, and T-Mobile launched the G1 last week, and customers paid $179 for the handset.

The G1 is the first handset to feature the highly anticipated Android operating system from Google and the Open Handset Alliance. The open-source Android was first announced last November with the goal of bringing the innovation and openness of the Web to a mobile industry that has been traditionally locked down.

Wal-Mart has more than 2,000 stores in the United States, and the company did not say which stores would be selling the G1. It's possible that the stores that sell the G1 will be in or near the 21 markets where T-Mobile has already rolled out its 3G service.

The discounted price could signal a trend that carriers are willing to heavily subsidize smartphones in order to get customers on long-term contracts with data plans. The iPhone 3G has sold exceptionally well partly due to its $199 entry price, and the Samsung Instinct was a hit for Sprint thanks to its $129 price tag.

The G1 has a 3.2-inch touch screen that slides out to reveal a full QWERTY keyboard, and it also has Wi-Fi, 3G connectivity, and Bluetooth. For T-Mobile, the G1 is a good way to keep users from defecting to AT&T for the iPhone 3G, and it sold out of its preorder stock despite tripling the inventory.

Overall, the handset has faced mixed reviews, with many pointing out that the operating system does seem promising. But the open-source operating system is already facing some scrutiny, as a security research said it has a security vulnerability that could enable a hacker to have access to information from a user's browser.