Google's got a case of iPhone envy
According to the report, Google CEO Sundar Pichai wants to "vertically integrate" Google's phone operations, adapting them to more closely resemble how Apple develops and manufactures its phones.
Currently, Google's Nexus phones are built in partnership with hardware makers like Huawei and HTC, who embed teams at Google's headquarters to develop the devices.
In the future, Google will reportedly treat those hardware makers more like Apple treats Foxconn - as a mere contract manufacturer, instead of a development partner. Going forward, Nexus phones may only have the Google brand on them.
The shift is taking place as Apple re-focuses its efforts on online services, which is how Google makes money. A fear at Google, according to the report, is that Apple could continue to make decisions that would limit Google's ability to make money through providing its services to iPhone users. Google generates the majority of its mobile revenue from Apple devices.
For example, Apple introduced a feature last fall that allows iPhone and iPad users to block ads earlier this year, potentially affecting Google's advertising business.
To head off that possibility, Google needs to break the near-monopoly Apple has on the high-end of the smartphone market.
Google even pays Apple for the privilege of its services to be preinstalled on iPhones. Google paid Apple $1 billion last year to keep its search engine as the default onf the iPhone, and Apple even gets a cut every time an iPhone or iPad user sees a Google ad through the default search.
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