Just before Christmas, a report from Reuters claimed that Google is working closely with Motorola to develop a smartphone that will grab market share from both Apple and Samsung. The news arrived shortly after reports surfaced that Google was selling off Motorola's set-top box business so that the company could focus on high-end smartphones instead.
News of the new Android phone, dubbed as X-phone or xPhone depending on the source, came from unnamed insider sources who told The Wall Street Journal that Motorola is currently working on two fronts: Android phones to be sold exclusively by Verizon Wireless, and the secret xPhone which will be enhanced by its recent acquisition of Viewdle, an imaging and gesture-recognition software developer.
According to the sources, the xPhone is slated to arrive sometime in 2013, followed by an "X" tablet. Google Chief Executive Larry Page has reportedly set aside a significant portion of Google's marketing budget for this particular unit, the Wall Street Journal quoted.
On Monday Unwired View published an interesting look on why Google would want to compete directly with Android partner Samsung. Simply put, it's because Google doesn't make money off the Android OS, and Samsung does. Instead, Google makes its revenue from services offered on the iOS platform, through Google Play and perhaps even the millions of Android phones on the market.
"The fundamental difference is that with xPhone, Google has complete control over the development, distribution and marketing of this device," Unwired writes. "They want to build a smartphone that is at par with iPhone and the Samsung Galaxy. Perhaps they will do even better, leveraging the latest R&D from Motorola, particularly the company’s work with multi-core processors and mobile battery technology. This will certainly be a boon for users."
News of the xPhone seemingly contradicts reports that Google claimed it wouldn't show preference of newly-acquired Motorola over its Android partners. In fact, several key partners supposedly received Android 4.1 "Jelly Bean" first as a compensation of the acquisition in an effort to calm 3rd-party fears. But as Unwired points out, the Nexus 4, a joint effort between Google and LG, received "middling" reviews when released in 4Q12.
That said, Google may simply think it's had enough and wants to take matters into its own hands much like Microsoft did by entering the tablet sector with the Surface RT and (soon) Surface Pro tablets. As previously stated, Google likely wants an Android smartphone that's at least on par with Apple's iPhone and Samsung's Galaxy line.
Even more, Samsung sold more than 200 million Android devices in 2012 – that's four times more than the nearest Android competitor – and boasts plans to sell more than 300 million in 2013 alone. And because Android is offered for free to manufacturers, Google won't see mounds of cash from those sales. There's even a possibility that Samsung could "fork" Android and cut out Google services altogether, thus reducing the revenue trickle by using Bing Maps and Bing instead.
Ultimately Google's goal with the xPhone may be to take control of the Android smartphone market away from Samsung so that one Android partner isn't crowding out the others. It's also seemingly looking to generate the same revenue load Apple takes in by establishing a fully-controlled, fully-closed Android hardware/software platform.
Of course, because the xPhone is unannounced and based off insider info, all of this is mere speculation at this point.
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