Wall Street analysts say the mobile phone 'to be launched as early as February 2008', will help company shares break the $700 mark.
"The mobile world has much greater reach than the wired Internet. Google sees this as the future," says Avi Greengart, a principal analyst with research firm Current Analysis.
In the short run, Gphone also threatens to dethrone the Apple iPhone as the wireless industry's newest star.
Google and Apple have worked closely in the past, but Gphone could test this cozy relationship and force Apple to make the iPhone a more open device than it is today.
The Web giant has made no secret that it believes mobile phones should be free to consumers, where revenues are generated through advertising and no single carrier has a lock on users.
Lehman analyst Doug Anmuth says the Google phone will be a "low-priced, simple form factor handset with an operating system specifically designed for Internet applications."