Apple's ( AAPL) iPhone has become the prize that has pulled the two largest wireless players into a head-to-head contest, according to today's rumormongers.

Apple is reported to be in high-level talks with Verizon ( VZ) to make CDMA iPhones, according to a story Monday in USAToday.

On the-first quarter earnings call, Verizon COO Denny Strigl said the company is "always open to discussions," but added that it has "nothing to say about Apple today."

TheStreet couldn't confirm the talks but discovered that AT&T's ( T) exclusive iPhone agreement with Apple is set to expire in the second quarter of 2010, a year from now, according to people familiar with the deal.

If the discussions are true, the timing would be about right for Apple should it begin reconfiguring a phone to work on Verizon's network.

The exclusive Apple deal has been a boom for AT&T, as the first-quarter results showed. The agreement was widely expected to expire sometime next year. The second-quarter deadline is a lot sooner than some may have expected.

Clearly, AT&T would like to extend the agreement, and Apple may simply be checking its options before making any new commitments.

There are several scenarios to consider. Apple could be in discussions with Verizon on future devices that would work on Verizon's upcoming long-term evolution, or LTE, network. Verizon promises to be a year ahead of AT&T on the LTE or 4G upgrade path, and other phonemakers like Nokia ( NOK) have been interested in long-range device plans.

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