"You might want to tell me the difference between a large phone and a tablet," he said. Now, Google is apparently planning a "large phone" of its own, and will have to answer that same question itself.
According to the New York Times, Schmidt "told friends at a recent party in Los Angeles about the new device, which would exclusively run the Android operating system." It's worth noting that the company's own Chrome OS could do the trick, but Android is a bit more entrenched app-wise. Then again, it doesn't help comparisons to the upcoming tablet being a large phone.
And that's pretty much it for details right now, aside from the obvious report that Google is in talks with content publishers to bring books, magazines and more to the future device. It's not an official official announcement, but it's about as close as you can get with a full-blown press release.