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Report: Facebook working with INQ on two phones

Bloomberg reports the social-networking giant is working with a social-focused handset maker to create two smartphones that highlight Facebook features.

Facebook is working with mobile phone maker INQ Mobile to create two smartphones that will highlight core features of the social-networking giant, according to a Bloomberg report.

The devices, which may have a network tie-up with carrier AT&T, are expected to be released in Europe in the first half of 2011 and in the U.S. in the second half, according to the report, which cited three unidentified sources familiar with the matter. INQ, which bills itself as the world's first social mobile handset maker, in 2008 unveiled its INQ1, which featured built-in integration with Facebook, Skype, Yahoo, Google, eBay, and Windows Messenger.

A Facebook representative denied the report.

"We are not working on creating two smartphone devices," Facebook representative Jaime Schopflin told CNET. "(If) those devices are being introduced (I can't speak for their product development), INQ would be 'working on them.' We have worked with them in the past on the FB integration on devices. We do not build phones."

Facebook, which had previously denied reports that it was "building a phone," reached out to hardware manufacturers and carriers this summer seeking input on a potential Facebook-branded phone, according to a CNET report.

The mobile market is seen as key for companies doing business on the Internet. There are nearly 5 billion cell phone subscribers worldwide and about 20 percent of them are expected to be using a device on a wireless broadband connection by the end of 2010, according to the International Telecommunications Union.

Mobile social networking has exploded in popularity in the last year. Among the 69.6 million phone users who tapped mobile apps over the three-month period ending in April, 14.5 million of them accessed social networks--a 240 percent jump from the same period in 2009, according to a recent study released by ComScore.

Facebook wouldn't be the first to try to create a phone specifically designed for social networking. In partnership with Verizon, Microsoft in April unveiled a social media-oriented phone called Kin geared toward the mainly for the 15- to 30-year-olds who post frequently to Facebook, Twitter, and YouTube. However, Microsoft pulled the plug on sales less than two months later in the face of criticism that it lacked key features and came with monthly fees as high as more capable smartphones, such as the iPhone and Android-based devices.

Update at 9:30 a.m. PDT September 23: Facebook comment added.