Google 'to launch own Android phone and music service

Search giant Google is rumoured to be on the verge of releasing its own Android-powered handset, as well as a music streaming service that could compete with Spotify.

Ashok Kumar, an analyst with Northeast Securities, claims to have spoken to Google's design partners about the plans. "Google is working with a smartphone manufacturer to have a Google-branded phone available this year through retailers, and not through telcos," he said.

When Google unveiled the Android operating system in 2007, it scotched rumours of a Google "gPhone", saying that the platform would produce "not just one gPhone, but thousands". It is unclear what has prompted the supposed shift in Google's intentions, and the company itself has refused to comment on the speculation.

The new device is rumoured to be a collaboration between Google and Taiwanese phone maker HTC. The gPhone will be powered by Qualcomm chips.

Industry website The Street, which broke the news, says that Google's entrance in to the Android space, and any decision to cut network operators out of the loop could mark a shift in the balance of power between handset makers and telecoms providers.

"The move would fulfil Google's pledge to bring a new generation of open-standard mobile internet devices to consumers," writes Scott Moritz. "By bypassing the carriers, who keep tight controls over the features and applications that are allowed on phones, Google will presumably offer a device that lets users determine the functions.

"If talk of the Google phone plan is true, the entrance of a unlocked, low-cost, Web-friendly touch-screen device will probably undercut other Android phone efforts by players like Motorola, Samsung and Dell."

Google is also rumoured to be on the verge of launching its own music streaming and download service to rival the likes of iTunes and Spotify. According to TechCrunch, Google plans to roll out Google Audio in the US in the coming months. Sources close to the project told TechCrunch that Google would be working on striking deals with the major record labels, and it was unclear whether the service would be launched outside of the United States.

Details of the rumoured service remain sketchy, with TechCrunch admitting that it was unclear whether or it would be a streaming or download service, or a combination of the two. The success of Spotify and Napster, and the recent launch of Sky Songs, highlights music's growing importance in the battle for online dominance.

Google currently has a music service in China, where it allows users to download songs for free. The move was seen as an attempt to win over users from Baidu, China's most popular search engine.