There has been tremendous buzz (or noise?) over the past several days about the launch of the first Android-powered phone the G1 from T-Mobile. We have been a skeptic of Android as an iPhone competitor for some time, but we do believe it will have an important impact on the mobile market. Primarily we see the next generation of low-cost handsets running on Android and offering smart phone-like features. In fact we think this is good for iPhone as it broadens the market appeal for smart phone class devices.

At the end of the day though will an Android powered device somehow displace the iPhone as the must-have mobile device? We’re skeptical. The Android-powered T-Mobile G1 reminds us of all the attempts to deliver Linux to the consumer space. An extremely powerful and capable operating system to be sure, but lacking of the spit and polish found in a mainstream consumer operating system like Mac OS X.

Maybe the better analogy would be the Zune versus iPod. Microsoft has managed to produce a device and software stack that provides 90%+ of the iPod feature set and functionality, but lacks the 10% “special sauce” that wins the hearts and minds of iPod users everywhere. We’re not sure the T-Mobile G1 is even good enough to be the Zune of the phone space but surely some future Android device will claim that title.

Apparently we’re not alone in our view. Investment Bank Piper Jaffray believes that the G1 will have little to no impact on the iPhone.