Further to the rumours swirling that US operator Verizon Wireless is in talks with Apple to offer two new iProducts, the Wall Street Journal has it that the company is also involved in discussions with Microsoft to offer an iPhone-rivaling device.

The project, code-named "Pink", sees Microsoft working with a third party developer to create a touchscreen multimedia phone, due next year, the WSJ quotes sources as stating.

The device is seen as a ploy from Microsoft's boss Steve Ballmer to try and up Windows Mobile's status against the iPhone and Android-based handsets, while for Verizon, it's an attempt to claw back lost market share.

The Windows Mobile phone is likely to include Microsoft's new Windows Marketplace for Mobile, its answer to Apple's App Store and may offer software created by Danger, the company that designed the Sidekick's software, that Microsoft acquired a year ago.