And an actual explaination from the company:
OK, let me lay this one to rest (oo-er, was that some unintentional innuendo there…?) with an "OFFICIAL STATEMENT OF THE TRUE FACTS"(tm):
The original inspiration for the Phalon ship designs did come from Outlanders, one of my favourite Manga at the time, and was definitely more "snails" than "phallic" in intent. Dave (Garhnhamghast here, so he DOES know what he's talking about on this!) did the sculpting for us. At this point the fleet/race had no name, I just wanted a fleet of biotech starships made.
Once Dave had done the first few ships, it became quite obvious that there were certain, shall we say, "symbolic influences" that some people would pick up on… so we decided to run with the joke, hence the name was chosen. Look on the bright side, they were very nearly the "Nobberonians"….
The rest, as they say, is history (or biology, or something).