Updates to this story
Facebook is working on developing two smartphones with INQ Mobile, according to Bloomberg, despite earlier denying that it had any smartphone plans.
The news came from three anonymous sources close to Bloomberg, which revealed that the social networking giant will be heading into the smartphone market over 2011.
One source revealed that the plans were not intended to be made public yet, but that AT&T is tipped to carry the phones in the US though it has not yet reached a deal with Facebook and INQ Mobile.
With over half a billion Facebook members and roughly 25 percent of these accessing the service through mobile phones, it's no surprise that Facebook is considering this move.
Facebook has worked with INQ Mobile in the past to provide Facebook features on INQ phones, but a fully branded Facebook device is a whole different matter and represents a significant shift in focus.
While details are scarce and Facebook and INQ Mobile have yet to confirm or deny this latest report, it is believed that the new smartphones will use Google's Android OS while providing a slew of Facebook features not present on other phones.
One of the smartphones is expected to have a QWERTY keyboard and touchscreen, akin to a BlackBerry, while the other will be touchscreen only.
One of the sources said that Facebook has not yet decided if it will use its name on the devices, but we can probably expect it will if it wants to push sales in the increasingly growing Android smartphone space.
The phones are expected to be released in the first half of 2011 in Europe, potentially as early as March, and the second half in the US, with US prices possibly being less than $100 dollars on a contract with AT&T.
Initial rumours about a Facebook smartphone surfaced over the last week, but Zuckerberg has denied them, telling TechCrunch: “Our goal is not to build a phone that competes with the iPhone or anything like that. For now, I think, everything is going to be shades of integration, rather than starting from the ground up and building a whole system.”