Scratch Apple, Verizon in Talks with Microsoft?

Microsoft and Verizon Wireless reportedly have a touch-screen, multimedia phone project, code-named Pink, in the works, the Wall Street Journal is reporting. Where this leaves Apple and its "iPhone junior" and media pad is unclear-at least until Verizon begins rolling out 4G.

Apple who?
Verizon Wireless, it now seems, is in talks with Microsoft to roll out a touch-screen, multimedia phone in early 2010, the Wall Street Journal reported April 28.
The project, code-named Pink, is said to be an effort to challenge the Apple iPhone.
Rumors of an iPhone on the Verizon Wireless network have been stirred before, and last week received a fresh turn. The Wall Street Journal, interviewing Verizon's chief executive Ivan Seidenberg, said Verizon was likely to get access to the iPhone in the coming years, as it converts its 3G network over to 4G, or LTE.
"Expect Mr. Seidenberg to come to Cupertino, checkbook in hand, to see what sort of deal he can make," wrote The New York Times, in regard to the Journal interview.
Days later, USA Today reported that "people familiar with the situation" said Verizon Wireless was in negotiations to bring an iPhone to its network by next year.
Then, on April 28, Business Week reported that Apple and Verizon Wireless were in talks over the possibility of distributing two new Apple devices as early as this summer-a pared-down version of the iPhone, and an Amazon Kindle-like "media pad" for watching videos, listening to music and making calls over Wi-Fi.
Now, "according to reports," the Journal wrote April 28, the Pink project will aim to extend Microsoft's Windows Mobile operating system, adding new software capabilities, and provide Verizon with a new way of competing with AT&T, the Apple iPhone's exclusive carrier.
According to the Journal's account, the Microsoft-Verizon relationship evolved from a "search-and-advertising partnership" between the two, and that while Pink has been in the works for several months, it's yet to be decided how the device will be branded. Microsoft is designing hardware and software, but a third party is expected to build the device.
A sore point in negotiations between Apple and Verizon was expected to be the issue of applications. Verizon sells applications, but Apple is has been firm about being the sole provider of mobile apps to the iPhone. To this point, the Journal's April 28 article states that Verizon may "add a twist" and begin selling applications for the enterprise.
Where a Microsoft-Verizon Pink project leaves Apple is unclear. Though as an analyst with Technology Business Research told eWEEK, echoing the Times interview with Seidenberg, a Verizon-Apple partnership may be likely, but not until the carrier implements 4G.