Microsoft, Verizon in talks to launch iPhone rival: Report

SAN FRANCISCO: Microsoft is in discussions with Verizon Wireless to launch a touch-screen multimedia cellphone in the US early next year in a bid to compete with Apple's iPhone.

While Microsoft is involved in the design of the phone's software and hardware, a third-party is expected to make the device, The Wall Street Journal reported, quoting sources close to the development.

Microsoft's project is code-named "Pink" and the cellphone would use the software giant's Windows Mobile operating system, the report said.

The news of a possible Microsoft-Verizon partnership came one day after another US newspaper reported that Verizon is in talks with Apple for the possible development of an iPhone for Verizon, with the goal of introducing it next year.

A deal between Apple and Verizon would mark the first time that Apple will produce a version of the iPhone for a CDMA wireless network, USA Today had reported earlier.

AT&T, whose wireless network uses GSM technology, now has exclusive US distribution rights to the iPhone. AT&T's exclusive rights will expire next year, but analysts said the company may try to persuade Apple to extend the contract for at least another year.