The rumor that Microsoft will release a smartphone under the Microsoft brand is already getting old. We first reported it in 2008. Microsoft's main problem is to not piss off their Windows Mobile partners with the introduction of their own smartphones.
Now Apple news site 9to5Mac has a rather specific rumor about Microsoft indeed releasing two new smartphones under the rumored Project Pink in 2010.
Apparently the new smartphones are designed by Danger (owned by Microsoft), maker of the Sidekick and manufactured by Sharp. The new phones are supposed to be co-branded with Microsoft and Sharp.
One of the new Microsoft/Sharp phones is supposed to be code-named Turtle and has a square shape with round corners. The 2nd new Microsoft smartphone has the codename Pure and is shaped like a candybar.

9to5Mac says in their report that they actually received photos of the new Microsoft smartphones. They are possibly releasing them on Twitter next week.
If Microsoft can build on the Zune HD look and UI and add some cool usability for texting, emailing, browsing and social networking into a phone, the Turtle and the Pure could become interesting contenders. With a 2010 release date they would run the new Windows 7 Mobile.