The Android phone is loose: The scene at the T-Mobile G1 launch in San Francisco

The competition between the Apple iPhone and the first Google Android cell phone is afoot.

T-Mobile opened its San Francisco store on Market St. this evening to launch the T-Mobile G1,the first cell phone with the Android software from Google. The 3G cell phone, built by HTC, has a bunch of cool features that will give Apple’s iPhone a run for its money. The rest of the stores nationwide open at 8 am tomorrow.

Judging from the crowd of 150 or so people waiting in line, the G1 is a hit. But it’s not anywhere near a phenomenon like the iPhone. (People lined up for days to buy the second-generation iPhone this summer). Christopher Laddish, the first guy waiting in line, didn’t care. The 26-year-old San Francisco journalism student was waiting since 8 am this morning. He put in more than 10 hours into the wait because his contract with Verizon was expiring today and he needed a new cell phone. I got to him after he did a half dozen interviews. He was sounding hoarse and looking tired.

“It’s a name I trust,” said Laddish. “I use a lot of Google applications. I don’t really buy new technology when it first comes out. But this competes with the iPhone on all fronts.”

The store manager shouted, “OK everybody, it’s showtime!”

As 6 pm Pacific time rolled around, the crowd gave a roar, counted down the last seconds as if it were New Year’s Day, and started moving into the store. Flashes from a dozen photojournalists were popping and an NBC TV crew followed Laddish to the cashier, where dozens of green and white boxes were waiting. As Laddish sat in a chair at the counter, he looked like he was in a daze, as a half-dozen long-lens cameras stared in his face and blasted him with flashes. But he smiled and held the phone up for the cameras.

T-Mobile had entertainers on hand, including a juggler and a guy in a candystripe suit on big stilts. One passerby snapped a photo of him with an iPhone. The guy on stilts asked, “What phone do you have?”

A passerby in a fancy suit said, “Idiots! They’re probably voting for Obama.”

Michelle Webb, a spokeswoman for T-Mobile, said the store expected hundreds of customers and it had hundreds of phones to sell. More than an hour after the opening, there were still about 100 people waiting in line. The event was three years in the making.

“This is the largest launch of a phone in T-Mobile’s history,” Webb said. “We haven’t said what our preorders were — only that they were three times what we expected.”

Second in line David Carrasco, a 36-year-old law office administrator from San Francisco, said that he loves T-Mobile’s service (not just because they gave him a free T-shirt). He said the G1 was cheaper than an iPhone, had a cheaper data plan at $25 and had an all-important removeable battery (whereas the iPhone doesn’t). He was looking forward to getting a lot of free, open-source software programs to run on the phone.

Google has a Marketplace starting up with more than 50 free programs on it. Erick Tseng, lead product manager at Google for Android, said that he was surprised to see so many people, but he declined to make any comparisons to the iPhone launch, or to even take a jab at Apple.

Tseng said Google wants to establish Android as a platform, not just a product. As such, the more applications on it, the better. That’s why the company made the Android software available as open source software today, Tseng said. The whole idea is to enable innovation in phones and to lower the cost of them as well.

“When we started this, we saw that the industry was suffering from a lack of innovation,” he said.

Tseng pulled out his own phone and demoed an application dubbed Shazam. The app will process the audio coming in from the phone’s microphone and determine what song is playing. It will parse the sounds in the song and then take the user directly to a web site with information about the song. It will also allow the user to buy the song right on the spot.