Despite its studied coyness, Apple in this job posting clearly states that it's seeking a product design engineer with experience in "design of input device electronics: mobile phone, game players, keyboards & mice."
While that's not the same thing as, "Yes, we're working on a phone," it's pretty close.But beyond that, the recent addition of Google CEO Eric Schmidt to Apple's board makes a lot more sense if you accept Apple will be getting into the mobile business.
Mobile is an area of significant interest for Google, particularly abroad, where phones have far greater penetration than PCs. With Google aggressively seeking platforms and applications to expand its search advertising empire, and Apple focused on adding enough value to the iPod to stave off competition from Microsoft's Zune, mobile phones that double as music players are clearly the way ahead.
Google might even have something to offer with all the dark fiber it has been acquiring.
Initially, Apple's phone may be separate from the iPod--the form factor required for a hard disk spacious enough for video files might lead to an insufficiently svelte handset for Apple's design sensibilities--but eventually the two devices have to converge. It just doesn't make sense to carry two devices if one could be designed well enough to do both tasks.
What remains to be seen is whether Apple aims to deliver an open mobile device that can be programmed and extended by users, or the sort of closed hardware that cellular providers know and love.