Google has confirmed that it has developed a “google phone”, although at this moment in time it is purely for internal use by its employees. The revelation has however heightened speculation that the internet giant is planning to start selling am Android based smartphone under its own brandname.

It is reported that the handset, codenames the Nexus One is being manufactured by Taiwan’s HTC. Unlike other Android smartphones currently on the market though, Google rewrote most of the operating system to deliver a unique user interface.

The Wall Street Journal, citing people familiar with the matter said that Google plans to start selling the handset, but direct to consumers rather than through network operators. Although this widens the potential consumer reach, it also means that the handset cannot be subsidised by the operators. The lack of access to retail outlets may also hamper sales in the short-term, although product awareness could overcome this deficiency in the long-term.