Gizmodo yesterday echoed an earlier report by TechCrunch stating that Google is hard at work on the "true Google Phone". A trusted source of theirs saw it with their own eyes and they say its release is a certainty.
Why would Google work by itself on a phone when it has already entered license agreements with a multitude of other handset providers and, by extension, carriers?
Well, I don't think this is a phone in the traditional sense. Just like Google Voice isn't a phone service in the traditional sense. But the device, like an iPod touch or Nokia N800 series tablet could make calls through VoIP....and therefore be called a phone.
In fact, I don't want to disparage VoIP. I am certain it is the future so I think a Google phone that ran on Android but used VoIP as the sole voice communications mechanism for the phone would be something special and groundbreaking.
A more important parallel is that Google is probably building their version of the Zune. Microsoft has hardware partners for Windows Mobile but they build a device that does much of what the Windows Mobile devices do...but does it much better because Microsoft owns the hardware and software, the entire vision.
Oh, and Apple does this really well with both the iPod touch and the iPhone.
The key here is that they don't need 3G communications. They can just use Wi-Fi, which is almost everywhere. Where it isn't, people can just pick up a tiny Mifi or Cradlepoint 3G/4G Wi-Fi router.
I've found that I am at home or I am at work for most of my day (unfortunately). There, I am hooked up to free internet. Having a wireless carrier is useless for this period of time.
The Mifi/VoIP works very well when I am out. There is no sense in paying for a data plan on a Mifi and another data plan on a phone - especially when data plans in general are so expensive.
I think Google will try to differentiate itself from traditional phones in the size of the screen as well. Without that 3G radio hardware you can make a pretty sleek device (see iPod touch). Google could build a screen as big as, or bigger than the Droid's 854x480 screen.
In this realm you are starting to get near 720P like high end netbooks are now coming with standard. at 4-5 inches, the thing could still fit snugly into your pockets.
This resolution which would be great for watching HD Youtube videos, as well. Something that would also help Google.
As both the supposed leaks have the device shipping in early in 2010, it will likely arrive at the same time as and compete with whatever type of tablet Apple plans on releasing.