The “Google Phone” is a totally unverified but interesting rumor.
Someone at a mobile phone forum claims he was exposed to information on
a potential Google Phone via a paid-survey website. Garett Rogers has a
copy of the screenshot and some of the specs this user saw.
Garett quotes from the design specs which were visible on the screenshot:

The Google Phone brings the power of the internet in your pocket,
in a simple and intuitive device. It combines the traditional voice and
SMS capabilities of phones with all the exciting Google services from
the PC such as Search, Gmail, Maps, Blogger...


The Google Phone, designed by Samsung, is a very thing and stylish
handset with a large screen and a QWERTY keypad so that it provides a
real internet experience.

Already, you can use a variety of Google services on the phone (and Google partners with Apple for the iPhone), but often they’re a pain to use or install due to the great incompatibility of current mobile phone software.

Via Google Blogoscoped

That looks pretty cool, I know I'd want one. Though I wonder if there will be a way to change the keyboard layout to Dvorak. I do seem to remember similar rumors about a Google PC a while back that never materialized.

Digg is getting excited (here) about a possible confirmation coming for Google's Spain/Portugal CEO. 

If you follow the different links to the original source, it takes you there.
 

La directora general de Google España confirma que la compañía está trabajando en el desarrollo de un teléfono móvil

"Las especulaciones sobre la posible entrada de Google en el área del
diseño y la venta de teléfonos móviles surgían después de que la
compañía publicara recientemente un anuncio de empleo en el que buscaba
ingenieros y analistas especializados en el sector de las
telecomunicaciones. En ese mismo reclamo, Google especificaba que se
encuentra en fase de experimentación con diversos sistemas de
comunicaciones inalámbricas.



En una jornada sobre la integración de Internet en la estrategia de
negocio, organizada por la Asociación para el Progreso de la Dirección
de la Zona Mediterránea, Isabel Aguilera ha explicado a Noticias.com
que si bien el 70% del tiempo de los ingenieros se dedica “a
desarrollar nuestro núcleo de negocio, es decir, la búsqueda y la
publicidad”, y un 20% a desarrollar “productos que tengan bastante que
ver con este núcleo”, es cierto que un 10% de ese tiempo se centra en
el desarrollo de productos “que en algún momento pudieran tener que ver
con nuestro negocio”.



Dentro de este último ámbito, Aguilera ha señalado que “se ha
investigado” en un teléfono móvil a través del cual se pueda “acceder a
la información”, además de en “la manera de extender la sociedad de la
información en las economías menos desarrolladas”. En este sentido, la
Directora General de Google en España y Portugal ha apuntado que aunque
“puede haber productos que puedan parecer extraños, todos forman parte
de nuestro proceso de innovación”.



En estos momentos, el motor de búsqueda cuenta con 36 productos y
“otros 18 que están en laboratorio” y, por tanto, en fase de
experimentación, entre los que se encontraría el citado teléfono móvil. "

It basically says that thinking of a Google phone has been part of the famous 20% time dedicated to personal projects within Google. For what I can understand from the last sentence, it is NOT confirmed that the Google phone is part of the actual products in Google Labs. I'll ask confirmation to my Spanish flatmate as soon as I get a chance

Engadget reports on that post

Ok, my flatmate said that it means that they are working on it (but it's only one research out of 18 others at this moment).

It could be a PC-replacement for a less-developed market per the Spanish article.  At least according to my taqueria spanish...

Can Google’s G-Phone hit the G-spot?
 

This article   says "But in the end the evidence for a Google phone is thin at best. Indeed,
the Wall Street Journal reported Saturday that all the phone talk is
misguided, and that Google is really developing new software for mobile
phones, albeit more sophisticated than what it has developed before."

"Google has poured cold water on claims it is developing a mobile
phone.

The search giant said it was more logical to form partnerships
with existing handset makers instead."

via http://www.smh.com.au/news/mobiles--handhelds/google-quashes-mobile-phone-talk/2007/03/21/1174153139660.html

I'm getting very confused... Is it all rumour and speculation, or is Google really working on a phone?

The Google Phone To Debut Early Next Year 

I think they really do.

Me too. I sure hope so. I'd be very interested indeed!

Cool!

Five Facts About Google Phone

Om Malik got some info from 'an inside source'

1. Google Phone is based on a mobile variant of Linux, and is able to run Java virtual machines.
2. All applications that are supposed to run on the Google Phone are java apps. The OS has ability to run multimedia files, including video clips.
3. The user interface is similar to a UI typical of mobile phones, and the image (with red background) floating around isn’t representative of the Google Phone UI. The entire UI is said to be done in Java and is very responsive. The UI, of course has a “search box.”
4. There is a special browser which has pan-and-browse features that are common to modern browsers such as browsers for iPhone and Symbian phones. The entire browser is apparently written in Java. But then others have told us that the browser is based on the WebKit core, the same engine in Safari and in iPhone, and Google has been  making optimizations to speed it up. This is one aspect of the Google Phone I am not sure about.
5. Initially there was one prototype, but over past few months Google has the mobile OS running on 3-to-5 devices, most of them likely made by HTC, a mobile phone maker, and all have Qwerty apps. The model that folks have seen is very similar to the T-Mobile Dash. Around 3GSM, there were rumors that Google, Orange and HTC were working together on mobile devices.

hmmmm So, no Gphone?

Where's my Gphone?
 

A little (or should I say a LOT) dissapointing.

Well, from what I have read, they haven't exactly ruled it out now have they?

Perhaps not, but since when does Google play around with silly announcements and then launch a huge, really cool product. (I'm gonna go with never).

Actually, I'm sort of happy about this. It's long been bugging me, in fact, after running a company that developed mobile software I can say it's a dream come true - if they pull it off.

Keep in mind that Sun tried, really hard... and ultimately failed to deliver over time. Google's approach is to completely dominate the device, whereas J2ME was always a container stuck off to the side of the phone.
 

I see the possible impact, but I just cant imagine all of the various companies coming together to create such a piece of software. Just seems like wishful thinking that is simply too good to be true (not to mention the amount of time I think it would take to get the platform deployed).