Exclusive: Google to Crash Android Party

Dell is also working on an Android smartphone, which is expected to be ready early next year at AT&T (T).

Skeptics point out that Google might have a hard time getting the phone out in time for the holidays, since it typically takes a year or more to bring a phone from design to production.

Industry analysts also argue that the move would be an affront to the U.S. carriers like Verizon, AT&T, Sprint (S) and Deutsche Telekom's (DT) T-Mobile, outfits that have been supporting the Android effort by selling or planning to sell subsidized devices.

"It's a bit of a departure from Google's strategy, but I think the speculation is valid," says Michael Cote of the Cote Collaborative. And as for getting the phone to the market quickly, Google "would probably use a partner they are familiar with."

HTC, the first developer of an Android phone, is also a no stranger to Qualcomm chips and would be the most likely manufacturer able to give Google what it wanted fast.

If Google goes through with the plan, it would point to how eager the Internet ad giant is to get Android in as many hands as possible so it can extend its search business beyond desktop computers to mobile devices. Going around phone companies to reach consumers is a bold move, but Google no doubt sees the wireless Internet market as a land-grab race with Apple, Nokia (NOK) and Microsoft (MSFT).

Google also has plans with computer maker Quanta to build its own netbooks that will run on a Linux-based Google Chrome operating system and be available next summer, says Kumar.

Representatives for Google, HTC and Quanta were not immediately available for comment.

Google shares were down 0.8% to $547.78 in recent trading.

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