A ruling in favour of EFF would be a huge financial blow to Apple, which earns 30 per cent of sales for every application sold from its iTunes store.

Google phone

The Nexus One, which will be the first smart phone designed by Google's own engineers, is set to be revealed at the company's headquarters in Mountain View, California.

In its invitation to Tuesday's launch, Google said the wireless market has only seen "the beginning of what's possible" with the free Android operating system that it introduced for mobile phones in late 2007.

Android was designed to make it easier to interact on a mobile phone with websites and services, including Google's, while providing an egalitarian platform to run applications developed by outside programmers.

The applications do not have to go through an extensive review before they can be distributed to Android-powered devices, a contrast from the control that Apple holds over its hot-selling iPhone.

Until now, Google has been content to let other companies design the devices relying on Android. 

Carrier choice

Those devices have so far have largely been distributed, like most other mobile phones, tethered to major wireless carriers that typically require buyers to lock into two-year contracts in return for discounts on the handsets.

But Google now appears to be ready to push its operating system in a new direction while trying to give consumers more flexibility to connect a mobile phone with the wireless carrier of their choice.

The company intends to stamp its own brand on the Nexus One and sell it directly to consumers over the web, leaving it up to the buyers to pick their own carriers, according to reports published in technology blogs and major newspapers.

A smart phone that allows consumers to choose from a variety of carriers could post a threat to the iPhone, which is tied exclusively to AT&T in the United States.

Just how much Nexus One shakes things up is likely to hinge on the phone's price.

Technology blog Gizmodo, citing leaked documents, said the Nexus One will cost $530 "unlocked," meaning it is not tied to a specific carrier, or $180 with a two-year service agreement with T-Mobile, a subsidiary of Germany's Deutsche Telekom.

'Jailbreak' case

A decision in the EFF appeal over Apple's monopoly of iPhone applications is expected within the next few weeks.

EFF wants the proposed removal of restrictions on the phone to be exempted from the country's Digital Millennium Copyright Act (DMCA) of 1998.

Removing the restrictions from the phone, a process known colloquially as "jailbreaking" has been strongly contested by Apple.

In comments filed with the US Copyright Office, the company said "jailbreaking" an iPhone constitutes copyright infringement and a violation of the current DMCA.

Greg Joswiak, a vice president at Apple, said: "This [the removal of restrictions] would severely limit our ability to continue what we are doing as well as innovate for the future."

Barry Fox, a technology analyst, said that the end of Apple's monopoly over the iPhone technology might have mixed reprecussions for the user.

"To Apple, this means it would lose some of the money its gets. To the consumer it means they would be able to get an Apple application - a little programme - from anywhere without paying Apple," he told Al Jazeera from London.

"But it would also mean that they would lose the guarantee they get at the moment that their iPhone really will run the application properly, that it will work properly, and will not be contaminated with viruses and malware."

Estimates put the number of iPhone owners who have jailbroken their phones in the hundreds of thousands.