Tech Rumor of the Day: Apple, Verizon Team Up on Tablet

Apple (AAPL) will have a tablet computer in time for the holidays, but the company is still mulling how to sell it.

The device, designed as a larger version of the iPod Touch, will have a 9-inch to 10-inch touchscreen and possibly a keyboard, as analysts, industry sources and news reports have outlined.

An initial version of the long-anticipated Apple tablet will be subsidized by Verizon (VZ), but Apple and Verizon "won't be as tightly integrated" as Apple's iPhone exclusivity deal with AT&T (T), says one source familiar with the companies, who asked not to be named.

Apple has been tinkering with the tablet for nearly two years. The popularity of the iPhone and particularly the iPod Touch have convinced the company that people are enamored with the touchscreens and see the swipe-and-poke, Web-friendly interface as more than just a fad.

The market, however, may not be as ready as Apple is.

Apple's Tablet Will Be an iFlop

With the iPhone hitting its stride, Apple needs a hot new device to carry the next leg of the gadget race. And while Apple will probably have a dazzling tablet, the category has been troublesome for other computer makers like Hewlett-Packard(HPQ) and Toshiba.

Apple has been reluctant to introduce the device, which has been ready as a prototype for nearly a year. Initially, analysts thought Apple would aim the tablet at the education market. But as devices like Amazon's (AMZN) Kindle have gained some popularity, Apple seems to think this year is the right time for a tablet.