Reports from multiple sources are indicating that Facebook is at work on a Facebook-branded smartphone. According to the reports, the company has hired a handful of former Apple engineers who worked on the iPhone, including one who worked on the iPad.
Speaking under the condition of anonymity, several employees of Facebook, including engineers on staff and others familiar with Facebook's plans told the New York Times' Bits blog that the company is looking to release a smartphone by 2013.
At least one Apple engineer who worked on the iPhone is said to have spoken with Facebook CEO Mark Zuckerberg directly about the inner-workings of a smartphone.
It turns out that this isn't the first time Facebook has tried to create a smartphone. It was reported by TechCrunch in 2010 that they were trying to build a Facebook-branded smartphone. However, it didn't pan out, because the company originally thought that they could take on the hardware design with no outside help.
They learned otherwise, and in 2011, according to AllThingsD, they teamed up with cell phone maker HTC for a handset code named "Buffy." A later report says Facebook is still working on "Buffy."
Facebook is being so careful with this secret that they are not posting job listings for it, instead finding the people they feel are suited for the job and contacting them personally about the project.
When asked about the handset, Facebook restated the company line they offered AllThingsD last year, that they "are working across the entire mobile industry; with operators, hardware manufacturers, OS providers and application developers." In other words, they didn't offer a denial or a confirmation.
According to one Facebook employee, "Mark [Zuckerberg] is worried that if he doesn't create a mobile phone in the near future that Facebook will simply become an app on other mobile platforms."
One thing we don't know is the operating system Facebook's supposed phone will run on. Will it be a variation of Android, or something built in-house? There is no mention of this in the New York Times blog, but AllThingsD says that it will be based on Android. Whether it's a fork of Android, like Amazon.com created with the Kindle Fire, or a more conventional implementation, is not clear.
It's also important to note that Facebook is now a publicly traded company, and they will be pressured to find more sources of revenue. With the mobile industry growing as rapidly as it is, it's an ideal market to step into.