(Updated from 10:59 a.m. EDT)
In what is likely to be seen as disruptive to the wireless status quo, Google is working with a smartphone manufacturer to have a Google-branded phone available this year through retailers and not through telcos, according to Northeast Securities analyst Ashok Kumar, who has talked to Google's design partners about the plan.
If talk of the Google phone plan is true, the entrance of a unlocked, low-cost, Web-friendly touchscreen device will probably undercut other Android phone efforts by players like Motorola, Samsung and Dell (DELL - Get Report). Motorola's entire turnaround strategy is based on the Android operating system. The company is expected to announce a ultra-thin Droid phone at Verizon (VZ - Get Report) next month. Both Verizon and Motorola expect the Sholes/Droid phone to be a significant challenger to Apple's iPhone.