Facebook will reportedly create a smartphone sometime next year or even earlier, The New York Times reports. According to the report, employees of Facebook and engineers, as well as people briefed on Facebook's plans, say the company hopes to release its own smartphone by next year, codenamed project "Buffy." The report also claims that Facebook has already hired former Apple software and hardware engineers who worked on the iPhone, and one who worked on the iPad. Facebook's comment onthe report was the following: "We're working across the entire mobile industry; with operators, hardware manufacturers, OS providers, and application developers."

Last month, Digitimes.com reportded that HTC would be the developed of Facebook's customized smartphone, slated to be launched in the third quarter of 2012 or later. The smartphone would be based on Google's Android OS and will also integrate the functions available on the Facebook, the report added.

Facebook's move into the smartphone market could help the company compete with Google, which already offers its own-branded Nexus smartphones in cooperation with Samsung and has also strenghtened its position in the mobile market with the acquisition of Motorola Mobility.