It seems that Apple has got all the big boys of IT whipped up into a mobile phone frenzy with the huge interest that surrounded the recent announcement of the iPhone. Microsoft is rumored to be developing a cell phone version of the Zune MP3 player. And now as part of an interview with Spanish news site Noticias.com , the Google CEO for the region, Isabel Aguilera, let the genie out of the bottle: Google is working on a mobile phone product.

OK, so what she actually said was that “some of our engineers’ time is dedicated to the development of a mobile phone” rather than “expect a product announcement next month” but it does at least put to rest the arguments over whether Google is interested in the cell phone hardware market for once and for all.

It also means that the recent deal that Google struck with Samsung in order to put Google applications on Samsung cell phones could be just the tip of that working relationship iceberg. The IT grapevine suggests that Samsung are the handset manufacturer most likely to be building the actual hardware for the Google branded and driven gPhone. Those same jungle drums tell of a device not dissimilar to a Blackberry, running VoIP services with built in search and Google powered office applications.

Travelling further along the rumor trail, you can take the patent application fork in the road and follow Google as it filed for a search tool that predicts what the user is looking for based upon location, history and time, all on a mobile phone handset. The idea being that your gPhone will double guess your search if it is around lunchtime and you have previously looked for somewhere to eat at this time, and suggest only local diners based upon your actual location. A gPhone could then show you the precise directions using Google Maps of course.

Certainly Google has been investing heavily in the development of mobile applications during the last couple of years, and putting these to good use on an in-house Google device makes a lot of business sense in a market clamoring for such big brand comfort.