Bill Gates may have ruled out the notion of a Zune phone over a year ago, but that has done little to quell speculation and rumors about the software maker's handset plans. Today, the Wall Street Journal quotes "people familiar with the matter" as saying Microsoft is in talks with Verizon over the production of a device to rival the iPhone.
Such a partnership does seem plausible. After all, while Microsoft has reiterated its focus on offering Windows Mobile for third-party handset makers, that hasn't stopped the iPhone from becoming hugely successful. As for Verizon, it may be in search of a high-profile iPhone rival to compete with AT&T. The WSJ says AT&T's exclusive contract with Apple could expire next year, but the carrier is pushing for a one-year extension.
So, what do we know about this purported Verizon-Microsoft project? The software maker is "involved in the design of the phone's software and hardware," the WSJ says, but a third-party firm would take care of building the actual device. The report adds that Microsoft and Verizon have been "working on the Pink project for several months." Based on what we recently heard, Pink may be Zune software retro-fitted to run on Windows Mobile.
While the WSJ doesn't really go into the hardware aspect, this story fits together with a previous analyst report that did. In February, Doug Freedman of Broadpoint AmTech said he believed Microsoft would build a cell phone based on Nvidia's Tegra system-on-a-chip. He went as far as to claim the device would be Nvidia's second Tegra design win after an HTC device.
If there's any truth to these rumors, we may see Verizon and Microsoft introduce the fruit of their labor early next year.