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The Facebook Phone Saga: What We Know So Far

INQ Facebook PhoneNews of a forthcoming Facebook smartphone has been flying around the Web this week, but all the rumors, denials and ambiguous public statements have made it pretty difficult for the casual tech follower to separate fact from fiction. While the story continues to mature with each passing day, here's a brief history of its evolution, and what we know thus far.

Rumors of a Facebook phone first began circulating last weekend, when TechCrunch's Michael Arrington claimed that the social network was developing new software for a phone, and was looking into partnerships with third-party companies to build the hardware. According to Arrington's source, the company began thinking about launching its own phone shortly after Google began working on its Nexus One phone.

Even though Facebook already produces popular apps for various smartphone platforms, the social network is reportedly concerned that it won't be able to compete with the likes of Google and Apple without its own operating system. The source went on to say that the company is striving to more deeply integrate social networking into the core functions of a smartphone, and that only a sliver of Facebook's braintrust are currently privy to the endeavor.

Although Arrington's claims were later substantiated by other sources, Facebook was quick to deny the rumors, and firmly declared, in a statement, that "Facebook is not building a phone." "The people mentioned in the story are working on these projects," a company spokeswoman said. "The bottom line is that whenever we work on a deep integration, people want to call it a 'Facebook Phone' (even internally) because that's such an attractive soundbite, but our real strategy is to make everything social and not build one phone or integration."

TechCrunch, however, persistently dismissed Facebook's denial as 'PR spin,' and stood by the legitimacy of its sources. Ultimately, Facebook CEO Mark Zuckerberg attempted to set the story straight, by agreeing to sit down for an interview with Arrington. Throughout the half-hour interview, Zuckerberg acknowledged that his company was entertaining thoughts of a more personalized, social mobile platform, but insisted that it had no plans to design its own operating system. "Our goal is not to build a phone that competes with the iPhone or anything like that," Zuckerberg insisted. "For now, I think, everything is going to be shades of integration, rather than starting from the ground up and building a whole system."

Despite his insistence, though, Zuckerberg left considerable room for speculation that Facebook may be joining forces with another company to launch a more socially integrated operating system. When the CEO admitted that the iPhone's OS is "hard to penetrate" without Apple's cooperation, for example, Arrington suspected that the company may turn to Google's more open source and tweak-friendly Android OS. While Zuckerberg was initially mum when pressed about the prospects of a Google-Facebook venture, subsequent reports confirmed Arrington's intuition.

On Thursday, Bloomberg cited three sources close to Facebook's who confirmed that the company is indeed working with both INQ Mobile and AT&T on the development of two smartphones. The sources also claimed that the new phones would likely run on the Android OS, and that the first batch of devices would roll out in Europe in the first half of 2011, with a US launch tentatively slated for the second half of the year. One phone is rumored to feature a QWERTY keypad and touchscreen, while the second will reportedly be exclusively built around a touchscreen.

Facebook, of course, remains characteristically opaque on the matter. "We've been working with INQ for a couple of years now to help them build a deeply integrated Facebook experience on their devices," a Facebook spokesman said in a statement. "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."

Stay tuned.

Tags: android, Apple, facebook, FacebookPhone, features, google, inq, InqMobile, iphone, MarkZuckerberg, MichaelArrington, rumor, smartphone, SocialNetworking, techcrunch