From the article:

Verizon Wireless is in talks with Apple to distribute two new iPhone-like devices, BusinessWeek has learned. Apple has created prototypes of the devices, and discussions reaching back a half-year have involved Apple CEO Steve Jobs, according to two people familiar with the matter.

Interestingly, the devices are described thus:

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, and watch high-definition videos, the person says. It would place calls over a Wi-Fi connection.

This seems to dovetail with predictions made by commenter Richard Monson-Haefel.

I think they’re on-point with respect to the tablet form-factor, as well as the fact that it will certainly be a fabulous platform for media consumption, and the like.

But I just don’t know about this Verizon business. My salt grain here comes from Apple’s insistence that GSM is the way to go for mobile, whereas Verizon’s networks are CDMA. Then again, that comment was in direct reference to the iPhone itself.

See also:

• Audaciously Premature Apple “Netbook” Conjecture
• A Bit of Apple “Netbook” Follow-up