HTC is reportedly developing a customized smartphone in cooperation with Facebook slated to be launched in the third quarter of 2012 or later.
The smartphone will be based on Google's Android OS and will also integrate the functions available on the Facebook, Digitimes.com reported today citing sources in Taiwan.
Neither HTC nor Facebook have commencted on the report.
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.
Facebook's invesments could be expanded in the smartphone market after becoming a public company sometime later this year.
HTC has already launched two Facebook-enabled smartphones, the Salsa and Chacha. Previously, the Taiwan-based company had agreed to work with Google on the Nexus One smartphone. However, Google then shifted to cooperating with Samsung as its primary production partner for the launch of its second and third smartphones.
Earlier this week, HTC reported a 70 percent drop in first quarter profit as it faces keener competition from Apple and Samsung.