Google to step up smartphone wars with release of own handset

Google is planning a shake-up of the smartphone market by releasing its own handset, a move that would tighten its grip on mobile software and see it compete directly with theiPhone.

The technology giant is in discussions with mobile operators about releasing a Google-branded phone that will extend the company’s move into hardware, sources familiar with the discussions told The Telegraph.

Google already develops the Android operating system that runs on four in five smartphones sold around the world, and endorses a range of phones made by partners such as LG and Huawei under the Google Nexus brand. But unlike Apple, it leaves manufacturing to other companies such as Samsung, with the company concentrating on developing the free software that runs on its phones.

The new device, which will be released by the end of the year according to a senior source, will see Google take more control over design, manufacturing and software.

Although Android runs on the majority of smartphones sold globally, Apple still dominates the lucrative high-end of the market. 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, and some manufacturers relegating Google’s own internet services which are included in Android.

Its own phone would allow Google to control the software, securing the future of services such as the Google search engine and Google Play app store that run on it.

Google's Android software has become increasingly fragmentedCREDIT: BLOOMBERG

“They are concerned that Android is fragmenting, that it needs to become a more controlled platform,” said Ben Wood, an analyst at CCS Insight. “I think they’ll seek to control it more, more like Apple.”

Google is best known for its internet software but has taken steps into hardware in recent years by releasing its own tablet computer, laptops and other gadgets. Earlier this year it hired Rick Osterloh, the former president of Motorola, to lead a new hardware division in a sign of its growing ambitions.

The company’s chief executive, Sundar Pichai, said last month that Google was “investing more effort” into phones, although he said the company would continue to support the Google-backed Nexus smartphones, which are expected to continue this year with handsets made by Taiwanese company HTC. “Our plan is still to work with [other manufacturers],” he said.

The move could add an extra dimension to EU claims that Google has abused Android’s dominance. In April, the European Commission formally charged the company with monopoly abuse, accusing it of using the success of Android and the Google Play store to push its search engine and Chrome web browser. The commission has the power to fine Google as much as 10pc of its $75bn (£55bn) revenue.

Google declined to comment.

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