Google announces in-house designed Pixel smartphone: Report

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Ahead of an official launch event, Bloomberg reported that Google will unveil the Pixel and larger Pixel XL, two new smartphones that were conceptualized, designed, engineered and tested in-house.

The company was largely expected to announce new handsets.

But in the past, Google has relied on co-branding efforts with its Nexus devices. The Pixel, Bloomberg's Mark Gurman reported, is assembled by HTC in an approach "no different than Apple's partnership with iPhone builder Foxconn."

The new phones, Bloomberg reports, are optimized for photo-taking and battery life.

A device with custom work, like the Pixel, helps the company plan complex efforts like virtual reality, but risks alienating partners like Samsung and LG, Bloomberg reported.

Google's special event on Tuesday is expected to formally reveal the new products, alongside the launch of a smart home device that pits the company against Amazon.

See CNBC's full coverage of the event here.

Tuesday's event is expected to reveal how the software will interact with hardware, where Google has traditionally been less focused than rivals like Apple. But during the company's July earnings announcement, Pichai made it clear that mobile is key to Google's future.

"Our investment in mobile now underlines everything that we do today," Pichai said.

Other products reportedly on deck are Google Home, the voice-activated assistant, as well as Chromecast Ultra, a streaming device that supports video resolution four times better than standard high definition.

Google is also widely expected to announce a "smarter" WiFi router, an operating system that is unified across Android and Chrome, and perhaps a virtual reality headset.

The products may reveal how the company's artificial intelligence software push will reflect on its hardware. Hiroshi Lockheimer, a senior vice president at Google, positioned Tuesday's Twitter event as a potential turning point for the company.

The core division of Alphabet, Google's vast advertising and search business has expanded over the past decade to include the Android mobile operating system and app store, as well as cloud computing and products like YouTube and Chromebooks.

More recently, CEO Sundar Pichai has set his sights on artificial intelligence as the next inflection point of the company.

"We think of this as building each user their own individual Google," Pichai said at the annual Code Conference earlier this year. "Google does a lot of things, but if you peel away everything and you distill it, this is the heart of what we do. It's what we are about."

That strategy shift was already reflected in this year's Google developer conference, where the company unveiled a virtual reality platform and an artificially intelligent, voice-activated assistant that works across devices like Google Home, as well as new mobile apps.

— Reporting by CNBC's Arjun Kharpal and Harriet Taylor.