Is Microsoft Making an iPhone Rival? Probably.

Word on the Wall Street Journal is that Microsoft is teaming up with Verizon to create an iPhone-like smartphone, complete with a touch screen and apps for sale at the Windows Marketplace. Reportedly, Microsoft will design the software and hardware, then hand the manufacturing off to a third party, kind of like Google does with its Android operating system. This isn’t a surprising rumor, but there’s a twist: USA Today reported that Verizon is in talks with Apple to reel in the iPhone. Could both of these unconfirmed stories pan out? Maybe, but get ready for yet another shocker: BusinessWeek says Verizon and Apple are actually working on an “iPhone lite” and a media pad that only includes Wi-Fi for making calls. With so many crazy rumors packed into such a short period of time, they can’t all pan out. Which one would you like to see the most? [Wall Street Jounal via Engadget]