According to TechCrunch’s sources, Facebook is creating its own cellphone. According to the post, they are building the OS and have tied up with a hardware manufacture to build everything else.
Specifically, Facebook wants to integrate deeply into the contacts list and other core functions of the phone. It can only do that if it controls the operating system.
The blog post describes that two Facebook employees, Joe Hewitt and Matthew Papakipos are leading the charge on the OS, using their previous careers as Firefox browser creator and Chrome OS builder (respectively) to launch something Facebook can be proud of.