A prototype phone from an unnamed manufacturer was shown running Android software during the keynote. The device featured a touch screen display and a startup screen full of colorful icons for launching programs and Web services, such as Gmail, with the touch of a finger.

A quick flick of the finger from a status bar brings up pending actions such as an imminent appointment or unread e-mail.

Andy Rubin, director of mobile platforms at Google (NASDAQ: GOOG), said some of the features were shown today publicly for the first time. Google bought Rubin's company, Android, in 2005. The Android software is the centerpiece of the Google-led Open Handset Alliance (OHA), which aims to create an open source mobile platform for developers.

Once Android is finished, OHA's goal is to make it available on a wide variety of handsets, giving developers, in theory, a far easier, more standardized way to distribute mobile applications.

In the demo, the touch screen features were evident as the user simply flicked his finger to go back and forth between Web pages or to access more features. Unlike the iPhone, the demo only showed touch using one finger, not multitouch. Rubin claimed multitouch isn't a software issue but more a function of appropriate hardware and sensors that weren't in the particular phone being demoed. He also said some Android-compatible mobile phones might use a trackball instead of touch.

The phone demoed included an accelerometer put to good use by Google. The demo showed Google's Street View" being used along with a compass feature that let you change your view as you turned with the device. That feature got a healthy round of "oooooohs" from the packed hall of developers.

Rubin stuck to previous company statements when asked when Android-powered phones might be available to consumers. "The second half of 2008," he said. Rubin also emphasized Android is a complete software stack with all the security and features to produce a new generation of mobile phones.

"Many of the devices used today are based on 20-year-old platforms, when security wasn't really thought about," he said. "Starting from a clean slate has its advantages. This is a platform that will let the carriers to more innovative things."

Rubin also did not rule out the possibility that Android could be adapted to run on existing phones if a phone provider or developer wanted to try that.

"I'm very impressed by what I saw," Maribel Lopez, analyst with Lopez Research, told InternetNews.com. "The iPhone is going to continue to advance, too, so this competition is going to lead to a lot of new features. My question is, where is Microsoft? Will Windows Mobile match up?"

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