Sources Say Google Prepping Its Own Smartphones: This Could Get Messy

While Google's Android operating system rules the software side of the mobile world, Apple's iPhone is the undisputed 800-pound gorilla in mobile hardware. But Google appears to have plans to challenge its rival by coming out with its own branded smartphone later this year.

Google has been talking with mobile service providers about releasing a Google smartphone sometime before the end of this year, according to a report yesterday in the U.K.'s Telegraph, which quoted unnamed sources.

The tech giant already offers its own line of Nexus phones -- manufactured by partner firms such as HTC and Huawei -- that run a company-controlled version of Android (other smartphone makers in the space customize the OS with various "skins" built on top of stock Android). But a new branded phone could enable Google to target a different, most likely higher-end, segment of the market.

Large Market, Small Profits

Android currently controls nearly 83 percent of the mobile operating system market, but Apple earns the most smartphone profits, accounting for 94 percent of the industry's take in the third quarter of last year, according to research from Cannacord Genuity, a financial services firm.

In addition to possibly wanting to change that state of affairs, Google might also want to exert greater control over Android by coming out with its own phone. With so many original equipment manufacturers producing various versions of the OS for their own devices, the Android ecosystem is often described as fragmented.

"The proliferation of Android device makers, many of which apply the software differently, means Google has struggled to ensure consistency, with some smartphone owners waiting months for updates," the Telegraph article noted. Coming out with its own smartphone could also help Google better control its future hold on search, apps and other features, the article added.

Signs Point to...

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