Wow. It looks like the rumor-mongering is getting out of control. Fresh off the talk that Verizon Wireless and Apple are getting hot and heavy about bringing out a CDMA iPhone, the Wall Street Journal is reporting Big V is talking with Microsoft to create an iPhone rival. Somehow, I don't think Apple's shaking in its boots.Citing the chatter bags that are "people familiar with the matter," the report said Microsoft's project "Pink" is working on a mobile device that will give Apple a run for its money. It will likely feature Windows Mobile with some Zune software elements for stronger multimedia capabilities, as well as the upcoming Windows Marketplace for Mobile to give it a counter to the App Store. I like Windows Mobile more than most of my online brethren and think it's a strong OS that just needs a few tweaks to get it back in the big time. But, this device won't knock off the iPhone.

The problem I have with any potential deal is that Microsoft's bag is software, not hardware. I know the software giant spent hundreds of billions to acquire the Sidekick-maker Danger last year, but I'm not convinced they have the goods to create an iPhone killer. Additionally, Microsoft's forays into consumer hardware have a checkered past - even the successful X-Box 360 was quite possibly the worst-built mass market piece of consumer electronics in history.

Verizon famously passed on the original iPhone because they couldn't put their stamp (cough*cripple*cough) on the device, and they've seen droves of customers switch to an arguably-weaker network to get their hands on it. I personally hope their negotiations with Apple go nowhere, as I would hate to see the iPhone gain a monopoly of the high-end U.S. handset market. Verizon should continue with its strategy of propping up other competitors, like it did with the BlackBerry Storm. The carrier should cozy up with companies like HTC, Palm, or an Android developer to nab a truly innovative device that will make those lusting for an iPhone think twice.