Over the weekend, a stream of rumors flowed from Sun Valley, Idaho, where Google (NSDQ: GOOG) executives supposedly talked about a Google-branded phone. I’ll explain what happened, but first off, it doesn’t appear to be true, and second, what is more important than whether a gPhone is in the works or not, is that the Google Android developer community is starting to show signs of malcontent.

Here’s how the gPhone rumor mill got going: It all started when The Hollywood Reporter wrote that three Google execs, who held a press conference in Sun Valley, apparently said that they are making “its own branded mobile phone as a replacement for the iPhone.” The story never comes full circle to give more information on exactly what that means, and no other reporters at the press conference picked up those comments. Nonetheless, the rumor caught fire and ran rampant on the Internet. GigaOm linked to the story, so did TechCrunch and ReadWriteWeb to name just three. TechCrunch took it a step further and reported that “San Francisco-based Ammunition Design Group, which has designed computers, mobile phones, hardware, and other devices for companies like Palm (NSDQ: PALM), Hewlett-Packard, Dell Computer, and Logitech, may be working with Google to create an Android-based, Google branded Gphone.” Despite this, all of it appears to be untrue and that the original reporter misunderstood what the executives said. Google said last year when it launched Android that a gPhone was not under development, and they have not changed course.

Here’s the real story: ReadWriteWeb reported that Google Android developers and even Google engineering employees are frustrated with how the Android platform is evolving. This is a real threat to Android. With iPhones flying off the shelves, and Windows Mobile devices already out there in droves, and the Symbian OS becoming open and free, Google has to build a healthy developer community in order to compete. A petition seeking more information about the SDK was posted late last month to the Android Discussion Group, complaining of delays and bugs that have yet to be worked out. It says: “I’m starting this petition, to express my personal frustration about the release cycles and the information policy of the Android SDK...In order not to lose many highly encouraged developers, I think its time to release some news about the development process of the SDK.” One of the 38 responses to the post is signed by someone claiming to be an Google Android engineer. He says have some frustrations, too. “There is some truth however in saying that we (the Google Android team) are very much focusing on playing our part in getting an Android device on the shelves as soon as we possibly can, and that focus comes at the expense of other tasks, like getting an SDK out.”

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