Last year, Google released the Pixel C tablet with their own hardware. Since then rumour mills have been rife with stories about Google's plans to release their own phone. All the speculation received a big boost recently when The Telegraph reported that Google was in talks with carriers about smartphone distribution under its own brand.
So far, the proprietor of the Android operating system has been working with smartphone manufacturers to produce Nexus phones which run on the stock Android operating system and come with tightly integrated Google services.
But now, Google wants more control over the process of making and designing smartphones. One major reason is the fragmentation of the Android versions. Most phones in the Android ecosystem are running very old versions of the operating system because manufacturers haven't bothered to work on software updates for those phones.
Rival Apple's approach underscores this. Apple has a greater control over the software updates of iPhone and iPad because of its control over their manufacturing and design.
However, Google has to rely on OEMs (Original Equipment Manufacturers) to provide Android updates to their various phones. Google releases the Android update code and then the OEM decides which phones the update will be rolled out for. Since Android manufacturers produce many phones in a single year, a lot of phones are left on previous Android versions. Therefore, Google wants an ecosystem where it has more control over updates.
Google have dropped many hints that it is working on making its own phone this year. It hired Motorola's former president Rick Osterloh to head a new hardware division. While in Motorola, Osterloh had briefly worked with Google, before Google sold Motorola to Lenovo in 2014.
Last month, Google CEO Sunder Pichai said that the company is investing more effort into producing smartphones. However, it will also continue to support the Nexus program.
The online search giant has already started producing hardware, either with the partners or by themselves. Chromecast, Nexus phones, Nexus tablets, Nexus TV box, OnHub router are a few examples. By the end of the year, Google will also launch a smart speaker under the Google Home brand. How smartphone manufacturers respond to Google's decision to make its own phones, despite Google's claim to continue to support them, remains to be seen.