Google is working with recently acquired Motorola Mobility on a handset codenamed "X-phone", according to a report in the Wall Street Journal.
Google acquired Motorola Mobility in May for $US12.5 billion to bolster its patent portfolio as its Android mobile operating system competes with rivals such as Apple and Samsung.
The Journal quoted sources saying Motorola is working on two fronts: devices that will be sold by carrier partner Verizon Wireless, and on the X phone.
Motorola plans to enhance the X Phone with its recent acquisition of Viewdle, an imaging and gesture-recognition software developer. The new handset is due out sometime next year, the business daily said, citing a person familiar with the plans.
Motorola is also expected to start work on an "X" tablet after the phone. Google Chief Executive Larry Page is said to have promised a significant marketing budget for the unit, according to sources cites by the newspaper.
Google did not respond to requests for comment at the time of of publication.