Google's Android division is blocking unlocked G1 developer version handsets from downloading paid applications on the Android market.

Google told InternetNews.com the policy is aimed at preventing casual user-to-user pirating of applications and only involves copy protected applications.

"This does not apply to all priced applications," said a Google spokesperson. "Developers and consumers can purchase priced applications that do not have copy protection."

The unlocked phones sell for about $400 after developers pay a $25 fee to join the Android developer program.

But apparently a loophole in the unlocked G1 device lets users get a copy of the paid application from the Android market. "We aren't distributing copy protected applications to these phones in order to minimize unauthorized copy of the applications," explained the Google spokesperson.

Google's Android market began accepting paid applications last week.

The Market, which opened in late September, had 307 free applications as of late November. According to Google there are now over 1000 free apps and hundreds of priced apps available in Android Market.

As of January, Apple's iPhone App Store offered15,000 applications, with downloads hitting 500 million.

Article courtesy of InternetNews.com.