This had to happen. Google already has a solid set of mobile apps and data transfer infrastructure, and now all they need is a killer tool/gadget to start supplying those apps to the end-user. What better than a mobile phone! I wonder if it would be as hyped as the Apple iPhone.
Until now it was a rumor, now its confirmed, and I hope Google doesn't deny or shun it in the near future. Some healthy competition from Google in the mobile industry will be good to spectate :)