The company has hired more than half a dozen software and hardware engineers who have worked on Apple's bestselling iPhone and one engineer who has iPad experience, the paper said, citing employees and other unnamed sources.
It has also expanded a group working on a partnership with Taiwan's HTC to create a smartphone codenamed "Buffy" -- a project first revealed last year by technology blog All Things Digital.
One former Apple engineer who worked on the iPhone and was recruited said he had met with Facebook chief Mark Zuckerberg "who then peppered him with questions about the inner workings of smartphones," the report said.
"Mark is worried that if he doesn't create a mobile phone in the near future that Facebook will simply become an app on other mobile platforms," a Facebook employee told the New York Times.
When asked for comment, Facebook neither confirmed nor denied the report.
"Our mobile strategy is simple: we think every mobile device is better if it is deeply social," it said in a statement emailed to AFP.
"We're working across the entire mobile industry; with operators, hardware manufacturers, OS providers and application developers to bring powerful social experiences to more people around the world.
Facebook's initial public offering this month raised a record $16 billion but has sparked fury, and lawsuits, amid concerns that key information about the outlook for the company might not have been made widely available.
The company said earlier this month that it was launching an App Center for mini-programs that plug offerings such as Pinterest or Draw Something into the leading social network, which has more than 900 million members worldwide.