Motorola's Moto X can be operated hands free using voice control, and is designed to be in permanent listening mode

Google has unveiled an American-built "self-driving" smartphone, the first made from scratch by Motorola since it was acquired by the internet company last year.

Using voice control as its standout feature, the Moto X is designed to be in permanent listening mode, able to serve up directions, a weather forecast or dial a number in response to a spoken command.

Using similar technology to the Google Glass spectacles which the company is preparing for commercial launch, the device can be operated hands free. By speaking the trigger words "OK Google now", users will be able to wake up the phone without touching its screen.

"Google is the first to commercialise the self-driving car," said Motorola chief executive Dennis Woodside, in a reference to the vehicles Google's laboratories have been developing. "This is the first self-driving phone."

The Moto X is the most high profile attempt by Google's founders Larry Page and Sergey Brin to mesh software and hardware creation under one roof, emulating the business model that helped Apple become the world's most valuable company.

While Apple introduced the world to voice commands through its Siri application, it has been criticised for its limited functionality and integration with other application in the phone, and must be activated by pushing the home button.

Google is using the Moto X to push the limits of voice control, but it also responds to motion. Sensors linked to the phone's camera allow it to be launched by two twists of the wrist, and the shutter is triggered by touching any part of the screen.

The company is embracing the "made in America" banner as a point of difference. In another deliberate contrast to Apple, whose reliance on Foxconn's assembly plants in China has left it open to accusations of allowing the iPhone to be produced by poorly treated workers, Google will assemble its handset at a newly opened and Motorola owned factory in Texas.

"Users have large screens, they have voice control – so at the end of the day what may attract users to replace their current smartphone is a completely new experience," said IDC analyst Francisco Jeronimo. "In my opinion, it's one of the biggest trends of the next year."

Google is also counting on the appeal of customisation. When ordering their handset, new owners will be able to choose front and back case colours and order their names or a short message engraved into the body of the phone, via an online service called Moto Maker.

With smartphone ownership approaching saturation point among high- to middle-income earners in the west, the Moto X is priced at the budget end of the market.

Featuring a 4.7 inch screen and a 10 megapixel camera, it will cost from $199 (£132) on contract for a handset with 16GB of storage. However, Google has no plans yet to release the handset in Europe. It will go on sale in the United States, Canada and Latin America from late August or early September.

• This article was amended on 2 August 2013. The original referred to 16MB rather than 16GB of storage and has been corrected.