AT&T's First Android Handset May Be Delayed Or Canceled, Sources Say

HTC Lancaster: An Android device for AT&T

AT&T (NYSE: T) may delay or cancel its first Google (NSDQ: GOOG) Android device built by HTC, reports digiTimes, which references industry sources in Taiwan. Engagdet reported similar rumblings yesterday.

So far, only T-Mobile has launched an Android device in the U.S., so a launch by AT&T would have provided a nice lift to the platform’s popularity. But reportedly, the device, which is codenamed the HTC Lancaster, has not yet passed AT&T’s review process. The delay will cause a setback to AT&T and HTC, as other handset makers, such as Motorola (NYSE: MOT), LG (SEO: 066570) and Sony (NYSE: SNE) Ericsson (NSDQ: ERIC), get close to launching their own devices — most likely on a broad set of carriers that could include Verizon Wireless (NYSE: VZ) and Sprint (NYSE: S) Nextel.

AT&T is expected to launch two HTC handsets running Windows Mobile 6.5, including the Touch Diamond 2 and Touch Pro 2 in October.

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