Apple vs. Google: The Stakes Are Rising

Google is developing a home-entertainment system that streams music wirelessly throughout the home and would be marketed under the company's own brand, according to people briefed on the company's plans. The effort marks a sharp shift in strategy for Google, which for the first would time would design and market consumer electronic devices under its name.

The company has mainly focused on developing the Android operating system that powers devices such as smartphones, tablets and televisions. It has also allowed other companies to build and brand the hardware that uses it. The new Android device, along with Google's pending purchase of device maker Motorola Mobility Holdings, also ups the ante in its ongoing tussle with rival Apple, which also controls both the software and hardware process. Google competes with Apple in the mobile market where the share of Android-powered phones grew rapidly to overtake that of iPhones last year, according to some estimates. Apple recently stepped onto Google's Web search turf by launching Siri, a voice-activated search feature on its latest iPhone. And Google over the past year has worked to try to catch up to Apple in other areas such as selling digital music, movies and e-books directly to consumers.