Last week we wrote about the Facebook IPO, and pointed out that that with a $100Billion valuation, Facebook would be worth twice as much as Hewlett Packard and almost four times as much as Dell, without ever having produced any hardware. Many industry pundits believe that that may be about to change.

Much of the speculation surrounding a possible Facebook phone began when Facebook purchased Instagram (an exclusively mobile app) in April 2012. We wrote a piece at the time on the speculation. It is now May, and those rumours are not going away. In fact they are increasing in volume and persistence. People had begun talking about the possibility of Facebook producing a phone back as far as 2010 (Business Insider believes that the mobile OS has been in development since then), but nothing had ever come of those rumours, and the company had never responded to the speculation.

The rumour mill was put back into overdrive this weekend with the release of ‘Facebook Camera’, a mobile app that uses much of the functionality of Instagram, patched together with heavy Facebook integration. The reaction to the app itself has been mixed so far, with many calling it inferior to Instagram. The release has, however, prompted many tech journalists to point out that Facebook now has three separate mobile apps; Facebook itself, Facebook Messenger and Facebook Camera (three is all you need for an OS, right?).

 facebook phone OS mockup facebook 

What Facebook Phone could potentially look like (from Designer Jay Moon)

The Verge reports, however, that Facebook has now begun hiring ex-Apple engineers, most of whom worked on the iPhone. This, in conjunction with the release of Facebook Camera, has resulted in a wave of speculation that efforts are being stepped up on the Facebook Phone. 16 year-old designer Jay Moon mocked up what a Facebook phone OS could potentially look like (see it here on The Next Web), and although it does resemble iOS in many ways, it’s certainly eye-catching. Amazon proved with the Kindle (and later the Kindle Fire) that creating a product ecosystem and customer base before releasing any hardware is a viable model, and Facebook may now attempt to emulate that model. With user figures nearing the magic 1Billion, they certainly have the potential to make a dent in the mobile market.

Would you buy a Facebook phone? Let us know by leaving a comment or chatting to us on Facebook or Twitter.