Some of you will probably have already seen the rumours of the gPhone, a handset purported to be Google branded and promoted by the internet giant. To be fair rumours of a gPhone have been around for a while now, the initial rumours eventually coalescing into the Android OS and the G1. However, these latest rumours seem to be a bit more firm and look to be taken seriously by more than a few commentators.

What’s so interesting about these latest rumours is the idea that Google is planning “an all-out assault on the mobile phone market”. What does that mean? Well The Times is reporting that it will feature a buuilt in advanced version of Google Voice for “the first extensive Google phone service with unlimited free calls”. Such a phone, running Android, would be the first time one company basically controlled everything on the phone, from the software to the firmware to the calls themselves. That would be a serious move if it proved to be true because it would offer a direct challenge, not only to the established manufacturers, but to the networks too.

In terms of specs there is obviously not much to go on at this stage, but the Times mentions that it will be “… one of the most advanced smartphones, with a large touchscreen display an a [Qualcomm] processor almost twice as fast as the one powering Apple’s iPhone 3G S”. Predictions are that it will run the Flan version of Android, which will reportedly usher in high performance 3D gaming for Android.

The big problem for Google though is that if they do release something like this, and reports are saying it could be out as soon as early next year, it would lay down the gauntlet to the mobile networks. With the ability to make unlimited free calls using Google Voice  the networks would essentially become dumb pipes providing nothing more than a connection. Networks don’t seem to like that proposal as has been shown time and time again (NTT DoCoMo aside). If the networks feel that a gPhone challenges their profit margins or relegates them to a back seat role will they be prepared to subsidise it? If not then what are the options open to Google? Well not many except selling the handset directly to consumers and we all know how expensive high-end SIM free handsets can be. Will consumers pay? They seem willing to pay high prices for the iPhone and maybe a high initial cost coupled with unlimited free calls might just be enough to sell it.

[via Pocket-lint]