Google on Tuesday unveiled its new Pixel smartphone with artificial intelligence built in as it directly takes on the iPhone with its own branded, premium-priced handset.

"We are building hardware with the Google Assistant at its core," said Rick Osterloh, head of a new hardware division at the California-based internet giant.

"We believe that the next big innovation is going to take place at the intersection of hardware and software, with AI at the center."

Pixel smartphone will be availabile with a five-inch display or a 5.5 inch display, starting at $649 for US customers, at similar prices to the latest iPhone models.

Pre-orders began on Tuesday in Australia, Canada, Germany, Britain, and the United States.

"It's the first phone made by Google inside and out," said Sabrina Ellis of the Pixel product management team.

By producing the hardware and Android software, Google is making a more direct challenge to Apple and its tightly controlled ecosystem.

Along with being the first smartphone to ship with Google Assistant, it will come with unlimited storage for photos and videos and be compatible with the company's new Daydream virtual reality platform.

Pixel also has a special program to make it easy for users to switch operating systems, say from an iPhone to and Android, by simply transfer contacts, content and even iMessages, according to Ellis.

Google announced an exclusive deal with US telecom provider Verizon for Pixel sales. Ellis said the company is working with service providers in other countries.

The version for sale at Google's online shop is "unlocked" to work with various carriers..