The Google phone has been rumoured for quite some time now, with pundits coming down on both sides of the fence as to whether or not it does or doesn't exist, or perhaps might or not in the future. Now the New York Times has waded into the fray with the claim that, yes, there may be a Google phone in development and that, yes, it may be coming soon.

Google is developing comprehensive software for mobile devices that goes well beyond search and the other services it already offers.

Despite the prototype and the persistent rumors that a Google phone is imminent, few in the industry expect the company to go into the business of selling phones. Analysts are speculating that the company plans to persuade hardware manufacturers to build phones based on its software that may initially be aimed at overseas markets.

"It wouldn't be surprising if they offer a co-branded phone configured for easy access to Google services," said Charles Golvin, principal analyst at Forrester Research.