Google plans to compete not only with Microsoft but Apple too, the company announced that, it will begin selling a Google-branded smartphone early next year. The device, slated to be manufactured by Taiwanese HTC, is being tested by Google employees at the moment. The in-house testing process, called dogfooding, is one of the worst-kept secrets in the technology industry this week.

Google employees indicated to media outlets that the device is slightly larger and thinner than Apple's iPhone. It looks like consumers will finally be able to get their hands on the Google Phone at some point next year.

The iPhone is likely Google's main target. Apple's smartphone dominates the U.S. market:  last month, advertising firm AdMob reported that 55 percent of smartphone web traffic came

from iPhones. And this would not be the first time that Google had initiated an ambitious

project: recent products from the Mountain View, California company include the Android operating system  for phones and the forthcoming Chrome OS computer operating system.

Google's phone will reportedly use GSM technology, the kind that AT&T and T-Mobile phones employ in the U.S. GSM is the most widely used network technology in other countries, and the Google phone will arrive unlocked, meaning that, unlike the iPhone, it won't be tied to any one carrier.