Bloomberg says that three people familiar with the matter have confirmed the project and that AT&T is considering whether to carry the devices in the U.S.
Facebook confirmed only that has a longstanding relationship with INQ and that the company believes social networking generally enhances users' interactions with devices.
"While we can’t speak for their future product development plans, we can say that our view is that almost all experiences would be better if they were social," said a Facebook spokesperson in an e-mailed statement. "Mobile integrations that we are currently working on include everything from an HTML5 version of the site to apps on major platforms to full Connect support with SDKs to deeper integrations with some manufacturers, like INQ."
Facebook's mobile presence has been growing rapidly. In November 2008, the company said it had 15 million Facebook users accessing its Web site through mobile devices. Today, that number has risen to 150 million. The company says that over 200 mobile operators in 60 countries are working to deploy and promote Facebook mobile services.
What remains to be seen is the extent to which deeper Facebook integration on Android phones steps on Google's toes. Based on Facebook CEO Mark Zuckerberg's comments in a TechCrunch interview, Facebook is still trying to figure out at which level of the computing stack it should operate on mobile devices.
Zuckerberg says that Facebook isn't pursuing its own mobile OS, the bottom of the stack. But the company is likely to experiment with integration at various higher levels: libraries that provide social features to all apps on the device; application frameworks; mobile SDK support for Facebook APIs; and simple, stand-alone apps.
One area where Facebook might seek to gain advantage would be through the integration of Facebook Connect, the company's single sign-on API. The idea would be that one's Facebook identity would be deeply linked to the device such that one's actions with the device would bring more data to Facebook to enhance its advertising business.