Facebook is absolutely working on a phone (or they're nuts)

Facebook phone was the big internet flurry of the weekend -- are they making one, are they not making one, what does a Facebook phone even mean?

Techcrunch, who claim the Nexus One vindicated their longstanding assertions of a Google phone, now say Facebook is also working a branded device.

Facebook is building a mobile phone, says a source who has knowledge of the project. Or rather, they’re building the software for the phone and working with a third party to actually build the hardware.

In a world where Apple, Google, Microsoft and HP/Palm have branded devices to go along with their other assorted software, hardware, and services, TC says Facebook is doing it as a competitive hedge.

Facebook issued a statement to Mashable denying the "charges":

“The story, which originated in Techcrunch, is not accurate. Facebook is not building a phone. Our approach has always been to make phones and apps more social.

Which could be read as similar to Steve Jobs' "no one wants to watch video on an iPod" statements, and is followed byso much marketing speak as to be rendered appropriately meaningless anyway.

Facebook has Joe Hewitt, who created the once trend-setting, now languishing, Facebook for iPhone. Facebook has Eric Tseng who used to be intimately involved in developing Android for Google.

Facebook sees the battle-lines being drawn. They're a closed garden on their own website but they're only one app, one site, among many on a smartphone. Apple has launched Game Center and Ping. Microsoft is bringing Xbox live to mobile. Google is stalking Farmville-makers Zynga and might be on the verge of launching their own "Google Me" Facebook competitor.

Friendster, MySpace, plenty of other networks have seen their user population migrate to newer, more appealing platforms. It's a competition for attention, retention, and the ad an assorted other revenue that comes with captured eyeballs. Facebook, like everyone else, wants to and needs to stay competitive in an increasingly mobile world. Google's already shown them the model - huge web presence with services on every mobile platfom, and a

Facebook is absolutely working on a branded phone with killer Facebook integration (maybe on top of Android OS?), at least in the lab, at least as a contingency plan.

Whether they ever decide to release it or not is a completely separate question.

But they're working on it. Or they're nuts.

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Rene Ritchie

EiC of iMore, EP of Mobile Nations, Apple analyst, co-host of Debug, Iterate, Vector, Review, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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