LG just announced that they’ve reached an agreement with YouTube to produce a YouTube phone.

Apart from just being able to view YouTube videos, this new device would allow you to record and upload your clips over a 3G connection. With the manufacturing being handled on the United States, the phone is scheduled to roll out in the European market sometime during the year’s second half.

While at first glance a YouTube phone might seem like a no-brainer, I’m not so sure. While a million people log into YouTube each day and 70,000 user-created content clips uploaded; that number becomes much smaller when whittled down to actually people. While I’m still at least attempting to contact YouTube for the official statistics, if you subscribe to Jakob Nielsen’s Participation Inequality Theory, only 10% of members of online communities actually contribute, with 1% providing the majority of contributions.

Meaning of 70,000 videos uploaded a day; only 700 people would be heavy enough users to be seriously interested in this phone. And while it might draw casual interest as a novelty, of the original 700 a day, there’s no reason to assume a majority would want to replace their current shooting method to begin with.

That’s not to suggest that the YouTube phone can’t be successful, but rather it’s success will more depend on how good of a video phone it is, rather than the strength of the YouTube brand.

UPDATE: YouTube just e-mailed this statement from a YouTube spokesman: "As a company policy we do not release metrics, but it would be accurate to say that hundreds of thousands of videos are uploaded each day."