Rumors of a low cost Google phone are all over the internet. In my opinion the big thing that should have the likes of Verizon and AT&T worried is the possibility of Google offering free phone service paid for by ad sales. At first everyone who is still under contract with one of the other companies will get a "Gphone" as an extra phone, figuring it's a one time cost. As Google's phone coverage proves to be as good as Verizon and AT&T customers will let their pricey plans lapse and Google will have acheived success and dominance in yet another market.
And for the record, this blog entry has been posted via (yes, you've guessed it) Gmail.