In October TheStreet reported a rumor that Google was building its own mobile phone. That was repeated again recently by TechCrunch, which said emphatically that Google was building a branded phone — despite Android founder Andy Rubin’s denials that Google was going to design its own hardware.

Now we get the Times of London with lots of alleged detail about the device and the way it would work:

The Googlephone promises to be one of the most advanced smartphones, with a large touchscreen display and a processor almost twice as fast as the one powering Apple’s iPhone 3GS. It will probably be the first phone to run a new version of Google’s Android software, codenamed Flan, offering high-speed 3-D gaming said to be as good as that of many handheld consoles.

According to Ashok Kumar, an analyst at Northeast Securities, a financial services firm, the Google-branded phone will be built by a third-party supplier, possibly the Taiwanese phone maker HTC, and will incorporate a processor from Qualcomm.

The real breakthrough, however, will come with the marriage of the Googlephone to Google Voice, the Californian company’s high-tech phone service. Google Voice gives US users a free phone number and allows unlimited free calls to any phone in the country — landline or mobile. International calls start from a couple of cents (just over a penny) a minute. Google Voice also uses sophisticated voice recognition to turn voicemails into emails, can block telemarketing calls automatically and offers free text messaging.

If true this would in fact be the Android answer to the iPhone, an integrated hardware-software device that could remedy some of the awkwardness that persists with Android. One problem: what network will the phone operate on? Will Google become an MVNO? Yes, Gizmo5 turns Google Voice into a Skype competitor, but that uses a PC IP connection to deliver calls. In mobile there must be some network that would provide data access.

And how would Google pay for all the free services, via search clicks? Google has talked about subsidized mobile services in the past; however making that work in actuality is another matter. MVNOs in the US and abroad are largely failures. (Moreover Blyk in the UK and SugarMama in the US, which used compulsory ad exposures to subsidize minutes and texts both can be considered failures.)

Then there’s the matter of Google competing with its partners, a seemingly very foolish move. For example, would Google license access to the Verizon network in the US and competitively undermine its own partner with a better handset and free services? It seems unlikely.

Yet these rumors are so persistent and there’s enough detail around them that we should probably expect something — perhaps an unlocked GPhone that works on existing carrier networks as earlier rumors suggested.

Related Topics: Google: Mobile

About The Author: Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling. See more articles by Greg Sterling