Aug. 15 (Bloomberg) -- Deutsche Telekom AG's T-Mobile USA unit will be the first carrier of Google Inc.'s mobile phone, which is expected to hit U.S. stores this year, the New York Times reported, citing people briefed on the company's plans.

The phone, to be made by HTC Corp., will use Google's Android software and will challenge handsets made by Apple Inc. and Research in Motion Ltd., the Times said.

To contact the reporter on this story: Joseph Galante in San Francisco at jgalante3@bloomberg.net.

Last Updated: August 15, 2008 00:19 EDT