According to a recent article by The Observer, Google could be working on releasing its own mobile phone. G-Phone (what else would they call it) could be released as early as 2008 if discussions between the search giant and Orange prove fruitful.

It’s suggested that the phone would be a co-branded one (Google and Orange) and would carry Google’s suite of software to make the mobile browsing experience significantly faster than current offerings.

Google has made no secret about its mobile intentions, having forged partnerships with mobile carriers and its ongoing work on mobilizing its applications (GTalk, Gmail) and improving local search. When you consider their attempts to build PC’s with Dell, this seems like a logical next step in their strategy.

According to Om Malik on GigaOM, the Google mobile phone speculation carries more credence than many will give it, considering Google’s acquisition of Android.

Android is a company that specialized in compressing and delivering the web to mobile devices, and was working on a new cell phone operating system. Apparently its owner, Andy Rubin, has been busy up at Mountain View, California working on a project - potentially this one.

While neither Google nor Orange have made any public announcements the potential synergies between the two companies in such a partnership make sense. Should this deal fall through, I am sure there will be other carriers that would be keen to explore a deal with the search giant. Stay tuned to see what pans out.