Wall Street Journal wrote today that Microsoft and Verizon Wireless are in talks to launch an iPhone competitor in early 2010:
Microsoft's project, which is code-named "Pink," aims to produce a phone that will extend the tech giant's Windows Mobile operating system, adding new software capabilities. It would also likely include Microsoft's new Windows Marketplace for Mobile, a store for cellphone downloads along the lines of Apple's App Store, these people said.
While Microsoft is involved in the design of the phone's software and hardware, a third party is expected to build the device, just as Google has worked closely with partners to make handsets based on its Android operating system, some of these people said.
Microsoft responded to this rumor by stating that there's no Zunephone, and denying there will be any Microsoft-branded phones.