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Zune phone rumors persist

Unsourced rumors suggest Microsoft's deep in planning a Zune phone based on Windows Mobile 7.

A quick follow-up to my earlier post about the lack of Zune mentions in Microsoft's presentations to financial analysts today. Mobile market follower James Kendrick blogs that Microsoft is holding its first serious internal meetings to coordinate the development of a Zune phone.

A completely unofficial mockup of a possible "Zune Phone," put together by a fan in the ZuneScene forums. ZuneScene

I don't have any inside knowledge about these meetings, but I don't doubt it for a second. Kendrick's posting, which is based on an unsourced rumor, suggests that any such phone will be based on Windows Mobile 7, will have a touch screen, and will feature connections to Windows Live services.

My guess: there will be plenty of Windows Mobile 7 phones in lots of form factors, and all will feature built-in connections to Microsoft's online services--that's the best chance they have to step ahead of the iPhone, whose MobileMe service is drawing flak even from big Apple fans. At the same time, the company will probably create hardware reference designs for one or two phones specifically designed for consumers, and meant to compete against the iPhone. These phones will connect to the Zune PC client software and Zune Marketplace, but otherwise will bear little resemblance to Microsoft's MP3 player. Touch screens are a must, but Microsoft will probably contract the manufacturing out--just like Danger did with its Sidekicks. (Microsoft acquired Danger earlier this year.) Likely timing will be 2009--I don't think they can get it out this year, unless this project's a lot farther along than Microsoft's letting on.