Facebook 'working on creating two smartphones'

Facebook is working with mobile phone maker INQ Mobile Ltd to create two smartphone devices that may have a network tie up with AT&T, Bloomberg said, citing three people familiar with the matter.

The smartphones would carry the popular social networking website's services and were set to be unveiled in Europe in the first half of 2011 and the United States in the second half of the year, the report said.

Privately held Facebook said previously that it was not building its own phone. Jaime Schopflin, a spokesman for Facebook, said the company's current projects included "deeper integrations with some manufacturers."

AT&T, the No. 2 US mobile provider, is still thinking about whether it should be the network carrier for the Facebook smartphone and has not yet made a deal, Bloomberg said.

None of the companies could not immediately be reached for comment by Reuters outside of regular US business hours.

Facebook declined to comment to Bloomberg on plans for specific phones. The company, however, told the agency that it continues to work with INQ Mobile, which has previously sold phones with Facebook features, along with other companies.

INQ Mobile, which is based in London and is backed by Hong Kong telecom firm Hutchison Whampoa Ltd, declined to comment to Bloomberg.