The move comes just a day before the first Android-powered smartphone — the G1 — is set to hit U.S. stores. The G1 is available only through T-Mobile .

Google first announced its decision to make the Android source code public in November 2007, as part of a larger open source computing and software initiative driven by the Mountain View, Calif.-based company.

The Android project is part of Google’s strategy to dominate the nascent market for mobile search and advertising .

Movement Toward Open Source

The trend toward open source application development is evident in numerous segments of the computing and software industry.

“In the last five years, Google has witnessed firsthand through social networking sites that the applications development community at large is stronger than any collective of corporate programmers,” Colin Gillis, an equity analyst with Canaccord Adams, told LinuxInsider. “The real potential will be when the developer community gets their hands on the [Android] source code. We want to see what the community does with a powerful code base like this.”

In many ways, Google’s strategy is cut from the same cloth as Apple’s (Nasdaq: AAPL) iPhone App Store strategy. While Apple hasn’t made any of its source code public, it has invited thousands of software developers to create applications for the iPhone. Today, there are thousands of such applications available for download — some free, some not — at the iPhone App Store.

“When you open up your operating system to other developers, you never know where good ideas are going to come from,” Steve Weinstein, an equity analyst with Pacific Crest Securities, told LinuxInsider. “Apple’s iPhone App store is great. Time will tell if Google will be as successful.”

All About Search

Despite its forays into the mobile industry, Google remains, at its core, an Internet search company. The Android operating system is just one component of the company’s plan to own the small but growing mobile search and advertising markets.

“Google wants a dominant position in mobile search,” Canaccord’s Gillis said. “It all goes back to that. Google has to keep driving more search volumes.”

The best way to do that is to appeal to a wide range of applications developers who can create compelling services that leverage Google’s commanding presence in the search sector.

“Google has to get Android adopted by developers and the major carriers so it has features that other phones don’t,” he said. “That’s the key behind this initiative.”

The G1

For Android to be successful, however, it will need to be available on more than one smartphone model.

“You’ll need more than just the G1,” Gillis said.

Today, the most dominant mobile operating system in the market is Symbian , followed by Microsoft (Nasdaq: MSFT) Windows Mobile and then the iPhone platform, he said.

Reviews of the G1 thus far have been mixed.

“In terms of its styling and design, G1 does not break new ground,” wrote Wired blogger Priya Ganapati. “It is thicker and heavier than the Apple’s iPhone and lacks some of the iPhone’s features, including video playback. Instead of standard headphone and USB ports, it has a proprietary combination port.”

Though Ganapati considered it a “bit of a letdown,” PC Magazine blogger Sascha Segan called the G1 “an initial solid effort” and gave it three and a half stars out of five.

“It’s missing a bunch of key features right now — like a decent media player and support for corporate e-mail, for instance. But the G1, manufactured by HTC, is a quality phone with few bugs, and given the open nature of Android, I’m confident that more features are on the way.”