Speculation hit fever pitch yesterday over the possible shape of Google’s next foray into telecoms as a host of blogs carried pictures of what was claimed to be a low-cost, internet-enabled handset - the “Gphone”.

The well-regarded Engadget site said that Google would make an announcement as soon as next week. Reports said that the Gphone would retail for as little as $100 (£50) when it makes its debut in United States.

Other blogs claimed that the phone would be fitted with a proprietary operating system that would rival the Symbian platform used by manufacturers including Nokia, the largest mobile maker, and Microsoft’s mobile version of Windows.

CrunchGear, a sister of the Tech-crunch site that broke the news of Google’s $1.65 billion acquisition of YouTube last year, said that Google was “assessing over 20” phone models from HTC, the Taiwanese manufacture that has figured consistently in speculation over a possible move into hardware by the search specialist.

It added that the Gphone would come fitted with Google Talk, the company’s system that allows users to make free or cheap calls over the web.

A Google spokesman said that the company would not comment “on rumour and speculation”.

Photographs on the web suggested that the handset would be fitted with a touchscreen, echoing Apple’s recently launched iPhone. It was also reported that the Gphone would allow users to surf the web, would come fitted with a version of Google Maps and a global positioning system element and would be compatible with Gmail, Google’s e-mail system.

Google is said to have shown a prototype to mobile operators in the United States, including AT&T, T-Mobile and Verizon Wireless. The company has already forged deals with a host of mobile operators, including Vodafone, of Britain, to have its software fitted on their devices.

With the mobile advertising market estimated to hit $11 billion by 2011, the largest players in internet services - Google, Yahoo! and Microsoft - are all focused on mobile as a key source of future revenues. Google’s search engine comes preloaded on handsets made by companies including Samsung and LG. Yahoo! has launched a version of its e-mail service that allows users in America to send text messages from computers to mobile phones.

Google recently expressed interest in placing a $4.6 billion bid for a licence for part of the US airwaves, an asset that could be used to start a wireless broadband internet network.

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