Businessweek: Verizon in talks to distribute iPhone Lite, Tablet as early as this year

http://feedroom.businessweek.com/linking/index.jsp?skin=twoclip&fr_story=816e6f8e0ae953ce1c952ae3b0cac12dd829fd61&rf=ev&hl=true

Starting to see a pattern here?  We are.  According to Businessweek:

Verizon Wireless is in talks with Apple to distribute two new iPhone-like devices, BusinessWeek has learned. Apple has created prototypes of the devices, and discussions reaching back a half-year have involved Apple CEO Steve Jobs, according to two people familiar with the matter.

One device is a smaller, less expensive calling device described by a person who has seen it as an "iPhone lite." The other is a media pad that would let users listen to music, view photos, and watch high-definition videos, the person says. It would place calls over a Wi-Fi connection. One of these devices may be introduced as early as this summer, one person says.

Are you starting to believe that this Verizon thing might actually be true? Whatever the case, this rumor just got a whole lot more interesting!  Is Apple just playing hardball in its negotiations with AT&T or is it interested in selling two different portable devices on Verizon’s network, including the mythical tablet device?  We’re kinda wondering why Verizon would be carrying a device that would place calls over Wifi…but don’t let the details get it the way.  There’s more!

Businessweek continues:

The new Apple devices under development, if introduced, hold the potential to shake up the tech industry. The media pad is smaller than an Amazon (AMZN) Kindle electronic reader, but its touchscreen is bigger than the Kindle’s, says the person who has seen it [The Kindle has a 7-inch screen]. Carriers such as Verizon and AT&T are keen on striking deals to supply wireless Internet access to these new small computing devices, such as netbooks, which represent revenue growth opportunities. Phone carriers also fear being cut out of their core markets for supplying land-line and wireless voice services.

 "The media pad category might go to Verizon," said the person who has seen the device. "We are talking about a device where people will say, ‘Damn, why didn’t we do this?’ Apple is probably going to define the damn category."

The new iPhone-like device is slightly thinner and smaller than the existing iPhone, people say. The reason the device is much cheaper than existing iPhones is that it relies on a so-called system on a chip, which incorporates many types of chips and drives down the cost of silicon in such devices, says one source familiar with the design. This new chip could also potentially be used in the media pad. "It will have a much lower cost that will blow away the margins on the BlackBerry and the iPhone," the person says.

Wow.