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The rumor that refuses to die has new life: A report Thursday says an iPhone compatible with CDMA networks is being manufactured for this holiday season.

Taiwanese trade publication Digitimes is at it again, reporting that contract manufacturer Pegatron has the order from Apple for a CDMA version of the iPhone 4 and “is currently using its plants in Shanghai, China, to produce the products.” The report says that the product would be ready by the fourth quarter of this year.

It echoes The Wall Street Journal’s report from earlier this year that Pegatron has been contracted to make a CDMA iPhone.

Verizon’s current network is CDMA, so the report is reviving the idea that a Verizon-compatible iPhone is around the corner. It’s a rumor that has made the rounds for years. And while it’s likely that the iPhone will come to Verizon eventually, by the end of this year seems a bit soon.

For the past four years, Apple has released a new iPhone in early summer, and customers have gotten used to upgrading their phone every or every other year. There are plenty of Apple customers who would be extremely unhappy if they make the jump to AT&T this summer only to be told a few months later that Verizon is now an option.

And then there’s the exclusive contract between Apple and AT&T, which Apple has said runs until 2012. It’s possible the contract terms have changed, but a Verizon spokesperson went on record a few weeks ago saying that there are no plans to offer Apple products in “the immediate future.”

But there are some other clues that there eventually will be an iPhone on Verizon: AT&T has had a lot of well-publicized problems servicing the iPhone and it’s possible Apple is tired of defending the carrier. And AT&T just increased its early termination fee to $325 for smartphones, which could be a sign it anticipates customers could have a reason to jump their contracts earlier than usual.

(Credit: James Martin/CNET)