The phone, which features a slide-out keypad, is being manufactured by Taiwan's HTC Corp and will be sold by Deutsche Telekom's T-Mobile USA unit, which plans to unveil the device at an event in New York on Sept. 23.

AT&T Inc, the only U.S. operator selling Apple Inc's iPhone, set the price of the latest version at $199 in July, setting a benchmark for smartphones that can surf the Web, manage email and other multimedia features.

The Journal, citing people familiar with the matter, said T-Mobile USA plans to release new data service plans in conjunction with the Google phone that will be "aggressively priced."

Google, HTC and T-Mobile USA declined comment on the pricing for the phone.