Despite TheStreet.com’s previous report, Google’s head of Android development, Andy Rubin had this to say regarding Google making Android hardware:
We’re not making hardware, we’re enabling other people to build hardware.
Sounds pretty clear to me. I wouldn’t want Google making hardware anyway, they haven’t given me any indication that they would build something worth while.
Update 11/21/09: Michael Arrington Has Heard That Google is Building Android Hardware