Google to produce its own mobile phone in bid to bolster Android sales

In what many analysts see as a logical step in its efforts to strengthen its position in the mobile search market, Google is planning to bring its own mobile phone to the market during 2010.

Called the Nexus One and made by smartphone maker HTC, the phone will run on the search giant's Android operating system - around which Motorola and other cellphone makers have built devices - and will be sold online, the Wall Street Journal quoted sources as saying.

Users will have to buy their own mobile phone package separately.

It is believed Google may be looking to challenge wireless carriers such as Sprint and Verizon, as well as smartphone makers including Apple. It marks a departure for the leader in web advertising, which has rarely sold devices directly to consumers, the newspaper said.

Google's Android phones have won attention in the mobile industry lately, with Motorola and Sony Ericsson choosing to launch new top models running the system.

Analysts say the aim is to gain access to valuable consumer data that can be used to sell ads at premium prices, rather than to make money from direct hardware sales, as companies such as Nokia do.

Meanwhile, research experts at IDC estimate the market share for Android operating software rose to 5.4 per cent from 4.2 per cent between July and September 2009 in Western Europe.

IDC analyst Francisco Jeronimo described this performance as "below everyone's expectations".

He said: "Customers recognise the Google brand, but still do not understand what Android is. The lack of devices available didn't help to raise awareness, though this is expected to change, with more handsets from LG, Samsung, Sony Ericsson, Motorola, and other vendors hitting the market soon."

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