News site TechCrunch pointed to multiple sources in suggesting that a Google-branded phone could be arriving in the first months of 2010.
Google has thus far refrained from getting into the hardware side of the market, opting instead to offer its Android operating system as a software platform licensed to other hardware vendors and carriers.
The latest rumoured device, however, would be entirely Google's. TechCrunch founder Michael Arrington suggested that Google is handling the hardware and software design for the device, in a manner similar to Apple's approach with the iPhone.
Google has long been believed to be considering an entry into the smartphone market, and speculation has abounded since 2007 that the company is working on some sort of device.
Even after the Android platform was unveiled, reports persisted that the company was looking to develop its own handset models.
Smartphone vendors are increasing turning to Android, including most recently the Samsung Galaxy Spica.