The duo plans to have the device on the market by next year, Reuters said, citing a report in the Nikkei business daily.

NTT DoCoMo, a partial owner of KTF, is Japan's largest mobile phone operator and is a member of Google's Open Handset Alliance, a consortium developing phones based on the Android platform, which saw its first publicly available device last month with the T-Mobile G1 built by Taiwan's HTC Corp. KTF is partially owned by NTT DoCoMo.

According to the report, DoCoMo hopes to roll out its Android-based device at about 20 percent cheaper than current smart phones. Because Google is offering Android software for free to device makers, DoCoMo hopes to save on development costs. An NTT DoCoMo/KTF device will be the first Google handset sold by the carriers.

HTC and T-Mobile were the first to market with the G1, a touch screen device that looks to rival other touch screen titans like the Apple iPhone 3G and the BlackBerry Storm, Research In Motion (RIM) Ltd.'s first ever touch screen device, which will be in stores Friday, Nov. 21. But others are working feverishly to get their Google devices into users' hands.

The Open Handset Alliance comprises more than 30 mobile operators, device manufacturers, software makers and semiconductor companies looking to create devices around Google's open source mobile operating system. Other notable members include Broadcom Corp., Intel Corp, eBay, LG Electronics, Motorola, Qualcomm, Samsung and Sprint Nextel.

Motorola also plans to have a Google Android-based device on the market by next year. Recently, Motorola bulked up its Android development team, boosting the number of developers working on an Android device from 50 to 350.