The reporter noted that "The trio of Google execs also used the opportunity to talk about the inroads the company is making with its own branded mobile phone as a replacement for the iPhone." [That appears to be a mixup by the reporter, with Sergey and Larry actually talking about not producing their own phone, according to Reuters's Ken Li's notes in SAI.]
But, TechCrunch does have its own source, who "swears" that the Ammunintion Design Group "is designing the Gphone and that it is a seriously beautiful device." They've worked has worked with companies like Palm, Hewlett-Packard, Dell Computer, and Logitech in the past (a phone they designed for Sprint is pictured above). Not a confirmation b! y any me ans, but TechCrunch usually has decent info—so take that for what it is worth.
The more probable explanation for any sort of design work on a handset for Google is that they could be prototypes for marketing or other promotion—no one can make the call whether it's for production yet. [Tech Crunch and Mediaweek via BGR, Silicon Alley Insider]
