Google has a very good reason to make its own phone, but it's not what you think

One of the most persistent rumors in the tech industry is that Google will build its own phone.

Google already works closely with certain partners to have phones built to its specifications, but it's now talking to partners about a project in which it will take "more control over design, manufacturing and software," reports The Telegraph.

This gossip is puzzling to many: part of Google's Android strategy is that any company can build and sell a smartphone using Google's software - and it seems to be working.

Android runs on 78% of smartphones sold in China, 76% of smartphones in Europe, at 68% of smartphones in the United States, according to data released by Kantar Worldpanel on Monday.

But there's one big technical reason for Google to take stronger control of Android: the chips inside the device, which are currently designed by independent companies like Qualcomm and MediaTek. The notion of Google building a "vertically-integrated" smartphone that can take on Apple more directly is not as crazy as it may seem. Here's why:

Silicon

One of Apple's main advantages over rival smartphones based on Google's software is that Apple designs the chips that power its iPhones and iPads.

Chip design isn't a technical skill that a company can learn overnight. In Apple's case, it's the culmination of years of R&D and iteration that started even before it bought semiconductor firm P. A. Semi in 2008.

By designing its own chips Apple can optimize performance for its software, in addition to enjoying other benefits.

There's some evidence that Google wants to design its own chips, too. Earlier this year, it announced its first piece of custom silicon, which was targeted at servers, not smartphones.

The Information's Amir Efrati has previously reported that Google is building its own phone, citing discussions with chipmakers.

Apparently, Google wants to design its own chips for a few reasons:

• Camera speed and performance - like burst shooting - requires a specifically tuned processor.
• Virtual and augmented reality require high levels of camera performance, as well as the ability to process data from other kinds of sensors, like infrared light.
• Some sensors, like always-on microphones, need to be able to collect data without waking the entire chip up, which burns battery.
• Apple's custom chip includes a "secure enclave," or a piece of hardware that raises the security of the entire device, enabling technologies like TouchID or Apple Pay.

Security

But a huge reason for Google manufacturing its own phone would have to be security.

Apple actually criticized Google earlier this month for major security flaws in Android. At a talk at its annual conference, Apple security engineer Ivan Krstic talked about "Stagefright," or a particularly bad bug that affects every Android phone with old software.

"Google patched this bug very quickly, but it doesn't matter, because most of their users don't have the fix," Krstic said. "And a fix that is not installed doesn't do anyone any good."

The Telegraph reports that "fragmentation," or Google's inability to push updates, is a major reason that Google is designing its own smartphone. As of now, device makers and carriers often control when a phone gets new Google software and features - as well as bux fixes.

Timely updates is one thing. But if Google were to design its own silicon, it could take Android security to the next level.

"Because Apple owns all the hardware and software, we were positioned to address [security] in a unique way," Krstic said. "We've built security directly into the silicon."

Basically, Apple builds a unique coder/decoder into every single one of its chips. Because of that, it can handle security in a much cleaner way than Android devices can. This difference becomes most evident when handling payments - just compare Android Pay to Apple Pay.

Apple's "secure element method utilizes internal hardware to secure payment data, while [Android Pay] method uses software," Piper Jaffray analyst Gene Munster wrote in May.

"Apple Pay using a secure element inside of iOS has an advantage over Android Pay's host-based card emulation in that it's more secure, with a similar user experience," Piper Jaffray analyst Gene Munster wrote in May.

Although chip designers like Qualcomm make their own "secure enclaves," Google might be able to do more with more control and standardization.

Staff

There are other signs that Google is moving towards building its own phone.

In April, Google hired Rich Osterloh - apparently from under DocuSign's nose - to lead a new hardware division that's separate from the Android team.

And Google has several former Apple chip designers working for it, including its "chip lead for consumer hardware."

In recent months Google even hired a veteran of the contract chip manufacturing giant TSMC to be its global supply chain manager specializing in silicon.

The Telegraph says to expect the "Google phone" by the end of the year. Google says it doesn't comment on rumors or speculation.