According to a new rumor, Google is working on a Revolutionary new Real-time Voice Translation System. This new App will allow users to speak in their native language (e.g. English) and the receiver will get real-time translation in his own language (e.g. French). A report by New York Times claims that the new functionality will be released as an update to Google's Mobile Translate app on Android.
There are not a lot of details right now, but one thing is clear. Google won't be offering two-way real-time voice translation. Instead, it will pick up any ongoing dictation in a popular language with your phone's microphone and automatically translate it to a language of your choice using the already present capabilities of the Google Translate app. Currently, it offers written translation from/to 80 languages.
According to NYT, Google will also announce a service that will let you point your phone to any foreign street sign and get an automatic translation.