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No one at Google could immediately be reached for comment.
Google has moved rapidly over the past year to extend its reach beyond text-based, pay-per-click web search advertising into a variety of new markets, including online video, television, radio and print advertising.
Google has also expanded into enterprise software, which is traditionally Microsoft Corp's domain.
According the Wall Street Journal, the Google-powered phones are expected to meld several of its applications together, including Google Maps, YouTube and Gmail email.
The ground-breaking part of the plan, according to the newspaper, is Google's aim to make the phone's software "open" right down to the operating system, which controls applications and interacts with hardware.
This element will grant independent software developers access to the tools they need to build additional phone features, the newspaper said.

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