Some reports suggest that Google has shown a prototype device to phone manufacturers.

Eric Schmidt of Google has known to have spoken earlier about Ad supported Free phones for users

The Google phone or Gphone might reach markets within a year.

The search engine giant does believe in a Mobile Future and has big plans for the same.

Google works with Operators and Manufacturers to bundle its products like search and mail

It has not denied rumors about the G phone plans.

The gPhone might be a iPhone killer . The gPhone will have Gmail, Gmail and Search all preloaded.

Lets wait for some official confirmation.

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BBC