Update (3:17p ET): So, Facebook is Not Building a Mobile Phone.

Didn't really see that coming. TechCrunch is reporting this morning that a very credible source is saying Facebook has been secretly working away at a mobile phone that would enable them for much deeper integration into the operating system in Contacts and other levels of connectivity. How would they accomplish this? Two very powerful men may be behind this project.

Joe Hewitt is the first. He is probably most recognized as the creator of the Facebook for iPhone web apps and then the official app in the app store, but quit shortly after version 3.0 out of disgust for Apple's approval process and other terms and conditions of the app store. He is also well-known for helping create what is now the Firefox web browser.

Matthew Papakipos led his way through the Google Chrome OS project, expected to land by the end of the year. He quit this June and headed on over to Facebook, where he is now rumored to also be working on this Facebook mobile phone project.

Launch is currently unknown, as it is only a rumor -- but a very high priority one. Back when the iPhone launched in 2007, people didn't even dream about what Apple actually launched: an industry changing smartphone. Is Facebook working on a more low-key device or are they too planning to exceed our expectations?