British tabloid rag The Observer, started the rumour by claiming that Orange and Google were in talks about producing a Google-branded machine.
According to The Observer, the phone will come pre-loaded with mobile versions of Google apps like Google Earth, and Gmail. It will be made by HTC and will probably run Windows Mobile.
Now the rumour has been picked up by tech sites like Engadget which points out that Google's been moving into the mobile space for a while.
There are already handsets that come pre-loaded with Google software, and in recent months they've also offered mobile versions of Google Maps and Gmail for download.
No one has made it clear why Google wants to get into the hardware business. More here. µ
Sign up for INQbot – a weekly roundup of the best from the INQ