It should come as no surprise because Android is backed by the behemoth that is Google, but it is still a great achievement. In a crowded marketplace, selling the virtues of an open platform against the whizz-bang effects and brand recognition of Apple is a tough job.

What this means for the market is not as clear though – with iPhone OS 4 around the corner along with a new iPhone handset, Apple are likely to set new sales records and outsell Android heavily whenever launch day comes around. But for now, Android is king.

The story is getting very complicated now, with Gizmodo trying to argue journalistic immunity as a reason the police search of the reporter’s house is illegal, while others on the internet are saying that it is a simple case of handling stolen goods and therefore a legal search. Apple have remained remarkably silent.

Whatever happens, this will probably set legal precedent in how journalists can get a hold of leaked materials and whether or not they can be held accountable for their actions in this arena.

According to their own stories posted over the course of the last few days, they claim that an Apple employee who was having a drink with a friend in a bar accidentally left the phone behind when he left. The friend took it home and intended to phone the owner to return it to him – until he noticed the case was loose. Opening it up, he realised that what was held inside was the new iPhone.

Doing what friends do then, he decided not to return it but to sell it to Gizmodo for a rumoured $10,000 – something which could land both parties in hot water. Aside from the possession of what would be called a trade secret, the person who has allegedly sold the phone to the tech news site could be charged with theft, and Gizmodo with possession of stolen goods.

The plot is now thickening with the news that Apple have sent a strongly worded letter to Gizmodo asking for their phone back, leading some to ask whether or not this is all for real – could it be an elaborately staged publicity stunt concocted by Apple and Gizmodo?

Finally, the device itself – resembling something like the new Windows 7 Mobile phones, it has left the look of the original iPhone behind for sharper styling touches. Additions include a forward facing camera, plastic back plate for improved WiFi connectivity and a possible extra button for using with the camera funtionality. Watch this space…

While Apple are up against ever-increasing competition, with Microsoft launching their Windows 7 Mobile range, the new range of Android phones out and various other mobile OSes on the horizon, they will hope that the addition of features their customers have been asking for will keep their strong market position intact over the next year.

Other features include iAd, a way for app developers to earn money through in-app advertising which belies Apple’s aim to dominate mobile marketing, support for iBooks like on the iPad, app folders to help organise apps and spell checking functionality.

Apple have said that all new functionality will be available to the iPhone 3GS, while older units will get a subset of the features. Perhaps the biggest addition, multitasking, will not be supported by anything older than the 3GS model.