We’ve heard rumblings of a Verizon iPhone for a LONG time but nothing more than speculation and rumors. The latest words thrown into the VZW iPhone mix have been fromVerizon CEO Lowell McAdam himself, claiming he has recently met with Steve Jobs to discuss… something.

According to BusinessWeek, Apple is in discussions to create iPhone-like – emphasis on “like” – devices for Verizon Wireless. The two devices were reffered to as an iPhone-lite of sorts and a Media Pad and we could see at least one of them as early as Summer. So why a device “like” an iPhone and not an iPhone itself? Speculation is that by altering the hardware, and perhaps the name, Apple would avoid obligations to AT&T’s exclusivity clause that could have the iPhone tied up on their lineup through 2011.

A snippet from the article with direct quotes from the Verizon CEO:

In a recent interview with BusinessWeek, Verizon Wireless CEO Lowell McAdam confirmed that the company has spoken with Apple executives. “In the last six months, I have talked to Steve Jobs,” McAdam says. Although McAdam would not say what the two companies discussed, two people familiar with the subject said talks covered the new smaller iPhone-like device under development. Representatives of Verizon Wireless and Apple declined to comment. AT&T spokesman Mark Siegel says: “We are delighted with the iPhone and our partnership with Apple.” The company declined to make an executive available

On the more sinister side of things, other possibilities include that Apple is using negotiations with Verizonb Wireless as a leveraging chip to force favorable terms of an iPhone exclusivity extention with AT&T. Or, perhaps as a bargaining chip that would require Verizon Wireless NOT carry the Palm Pre if they worked out a deal for an iPhone-like device.

The article ends with an insanely interesting two paragraphs with direct information coming from someone who has actually SEEN these prototype devices:

“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.

Low cost Apple devices on Verizon Wireless? Sounds like a match made in heaven.