Reflections on Ice-Breaking
-- Ogden Nash, 1931
With that dictum in mind, I almost expect Verizon's (NYSE: VZ ) Manhattan offices to be swimming in the hard stuff. According to reports in BusinessWeek and The Wall Street Journal, Apple (Nasdaq: AAPL ) and Microsoft (Nasdaq: MSFT ) are talking to the telecom giant about fancy new mobile devices, and there's lots of ice-breaking to be done here.
The Microsoft “Pink,” the supposed code name for Mr. Softy’s new mobile device, could end up in Verizon's hot little hands, bringing a Windows Mobile-based touchscreen phone to the masses. An unnamed third-party manufacturer is expected to bring Mr. Softy's Pink design to life; that could be Samsung or HTC, but Microsoft's platform is in heavy use at Motorola (NYSE: MOT ) , too. In fact Verizon already sells Windows Mobile smartphones from all three manufacturers. The WSJ thinks that Verizon could get an exclusive distribution deal for this new device to beat back AT&T (NYSE: T ) and its iPhone onslaught.
Of course, BW says that it's the real iPhone that might be going to Verizon. Both stories come with anonymous sources, and everything is still up in the air at this point.
That said, I believe that the “Pink” story is the real deal, for a couple of reasons:
- Microsoft, lacking a top-notch smartphone today, has plenty of incentive to get a high-profile carrier like Verizon by its side. Sprint Nextel (NYSE: S ) and T-Mobile are not big and beefy enough for a high-impact launch, and AT&T already has the iPhone.
- Apple may very well be talking to the New Yorkers. But that might be a bargaining tactic for a better AT&T contract, more than it is a straight-up negotiation with Verizon. Steve Jobs & Co. are nothing if not cagey dealers.
- No offense to BusinessWeek, of course, but the WSJ's "people familiar with the matter" have a pretty good track record. As anonymous sources go, I don't mind trusting the Journal once in a while.
Don't expect a bottle of single malt from Google (Nasdaq: GOOG ) , though; Sprint and T-Mobile are more likely to release Android phones, because they are members of the Open Handset Alliance while Verizon isn't. But it ain't out of the question, either: Vodafone, which owns 45% of Verizon Wireless, is a member.
Anyway, Verizon should feel like the belle of the ball right now, even if some of its suitors may not have entirely honorable intentions. Whether the company ends up with a bona fide iPhone deal or simply a rival's best attempt at besting that beast, the largest network on the continent holds a lot of leverage and should get a sweet deal for a sweet phone.
The smartphone war is heating up. That's candy to all of the major players.