There has long been speculation that Microsoft would launch its own smartphone, but that speculation was for the most part dismissed. Until yesterday. Yesterday's Wall Street Journal reported that Microsoft and Verizon are talking about launching an iPhone competitor. The new device will also be a touch-screen, multimedia smartphone.
Microsoft is already in the business of cell phone software, and Verizon is also wanting to extend its own offerings and compete with AT&T, which has the lucrative iPhone contract. It's a perfect match.
The project, code-named "Pink", will create a phone that will extend Windows Mobile, add new software capabilities, and include the Windows Marketplace for Mobile store for cellphone downloads (similar to the Apple App Store). Microsoft will design the phone, but will not build it; instead leaving the manufacturing end to a third party.
There was no mention of incorporating Zune into the new device, although it would make sense from a competing-with-Apple standpoint. Rumor has it that the launch will take place in 2010.