Google to produce, sell own "Nexus One" phones: report

An employee answers phone calls at the switchboard of the Google office in Zurich August 18, 2009.

LOS ANGELES (Reuters) - Google Inc plans to sell its own cellphone direct to consumers as soon as next year, bypassing wireless operators in a rare strategic move, the Wall Street Journal cited sources as saying on Saturday.

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 newspaper cited persons familiar with the matter as saying.

Cellular service will have to be bought separately, it added.

The Internet search leader may be sounding a challenge to wireless carriers such as Sprint and Verizon, as well as smartphone makers like 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 it with their new top models.

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 or Research in Motion do.

Research house IDC estimates the market share for Android operating software rose to 5.4 percent from 4.2 percent in July-September in Western Europe, a key market.

Executives at HTC, the Taiwan-based world's No. 4 smartphone brand, were not available for comment. Google was also not available for comment. Google began sharing a version of the Nexus One with employees in recent days, the newspaper cited its sources as saying.

(Reporting by Edwin Chan; editing by Todd Eastham)