diff --git a/core/base_rules.mk b/core/base_rules.mk
index f0a6398..f92cf6a 100644
--- a/core/base_rules.mk
+++ b/core/base_rules.mk
@@ -98,23 +98,27 @@
 endif
 
 ifneq (true,$(LOCAL_UNINSTALLABLE_MODULE))
-ifdef LOCAL_IS_HOST_MODULE
-  partition_tag :=
-else
-ifeq (true,$(LOCAL_PROPRIETARY_MODULE))
-  partition_tag := _VENDOR
-else
-  # The definition of should-install-to-system will be different depending
-  # on which goal (e.g., sdk or just droid) is being built.
-  partition_tag := $(if $(call should-install-to-system,$(LOCAL_MODULE_TAGS)),,_DATA)
-endif
-endif
-
 LOCAL_MODULE_PATH := $(strip $(LOCAL_MODULE_PATH))
 ifeq ($(LOCAL_MODULE_PATH),)
-  LOCAL_MODULE_PATH := $($(my_prefix)OUT$(partition_tag)_$(LOCAL_MODULE_CLASS))
+  ifdef LOCAL_IS_HOST_MODULE
+    partition_tag :=
+  else
+  ifeq (true,$(LOCAL_PROPRIETARY_MODULE))
+    partition_tag := _VENDOR
+  else
+    # The definition of should-install-to-system will be different depending
+    # on which goal (e.g., sdk or just droid) is being built.
+    partition_tag := $(if $(call should-install-to-system,$(LOCAL_MODULE_TAGS)),,_DATA)
+  endif
+  endif
+  install_path_var := $(my_prefix)OUT$(partition_tag)_$(LOCAL_MODULE_CLASS)
+  ifeq (true,$(LOCAL_PRIVILEGED_MODULE))
+    install_path_var := $(install_path_var)_PRIVILEGED
+  endif
+
+  LOCAL_MODULE_PATH := $($(install_path_var))
   ifeq ($(strip $(LOCAL_MODULE_PATH)),)
-    $(error $(LOCAL_PATH): unhandled LOCAL_MODULE_CLASS "$(LOCAL_MODULE_CLASS)")
+    $(error $(LOCAL_PATH): unhandled install path "$(install_path_var)")
   endif
 endif
 endif # not LOCAL_UNINSTALLABLE_MODULE
diff --git a/core/clear_vars.mk b/core/clear_vars.mk
index 8d84814..11f7f84 100644
--- a/core/clear_vars.mk
+++ b/core/clear_vars.mk
@@ -122,6 +122,7 @@
 LOCAL_PROTOC_FLAGS:=
 LOCAL_NO_CRT:=
 LOCAL_PROPRIETARY_MODULE:=
+LOCAL_PRIVILEGED_MODULE:=
 LOCAL_MODULE_OWNER:=
 LOCAL_CTS_TEST_PACKAGE:=
 LOCAL_CTS_TEST_RUNNER:=
diff --git a/core/envsetup.mk b/core/envsetup.mk
index f861586..06fdf4d 100644
--- a/core/envsetup.mk
+++ b/core/envsetup.mk
@@ -196,6 +196,7 @@
 TARGET_OUT_SHARED_LIBRARIES:= $(TARGET_OUT)/lib
 TARGET_OUT_JAVA_LIBRARIES:= $(TARGET_OUT)/framework
 TARGET_OUT_APPS:= $(TARGET_OUT)/app
+TARGET_OUT_APPS_PRIVILEGED := $(TARGET_OUT)/priv-app
 TARGET_OUT_KEYLAYOUT := $(TARGET_OUT)/usr/keylayout
 TARGET_OUT_KEYCHARS := $(TARGET_OUT)/usr/keychars
 TARGET_OUT_ETC := $(TARGET_OUT)/etc