According to Android Software engineer Dave Sparks, T-Mobile G1 users wont be seeing any more updates beyond the current Android Cupcake 1.5 software. According to sources, the HTC G1 device does not have enough internal flash memory to support any of the new software updates, such as Dounut (Android 2.0). The T-Mobile G1 was the first Android device released in the world, and until now continues to be the single most sold Android device on the market. With the HTC Magic (G2, or MyTouch 3G) having recently broken the 1 million sold mark, Android hardware is drastically improving and expanding, along with significant upgrades in software, not to mention some incredible additions to the Android Applications Market.

Or is this all just a scam to get T-Mobile customers to move on to the myTouch 3G and other Android devices….let the conspiracy theories begin!

T-Mobile G1 users, let us know how you feel in the comments! We wouldn’t be all that thrilled if we were you.

Via EngadgetMobile

Update Via EngadgetMobile: We’ve received a statement directly from T-Mobile on the matter, saying “We plan to continue working with Google to introduce future software updates to the T-Mobile G1. Reports to the contrary are inaccurate.” It’s unclear whether those are just going to be security and stability updates to 1.5 or whether we’ll see wholesale new versions like Donut and beyond, but for the sake of G1 owners everywhere, we’re hoping it’s the latter.