The Narrative Fallacy writes "According to BusinessWeek, Verizon Wireless is in talks with Apple to distribute two new iPhone-like devices — that are not iPhones. AT&T's contract with Apple covers "all models" of the iPhone but it only covers iPhones so if Apple builds something that isn't an iPhone, they won't be violating Apple's exclusivity contract with AT&T which runs at least through 2010. 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, watch high-definition videos and make calls over a Wi-Fi connection. If the devices don't make cellular voice calls, they may be able to avoid the iPhone's AT&T exclusivity clause. An agreement to distribute Apple communication devices via Verizon Wireless may cost AT&T some of the business it has gained as the sole Apple carrier but even if Verizon Wireless and Apple fail to strike a deal, talks between them increase pressure on AT&T to accept partnership terms favorable to Apple. Apple could also use the prospect of an iPhone-esque device as leverage to prevent Verizon Wireless from introducing the Palm Pre, or at least delay the introduction of the smartphone on Verizon's network. "The media pad category might go to Verizon," said one 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.""