"Zune Phone" rumors back in the news

Is Microsoft working on a Zune phone to compete with the iPhone? We first asked that question more than a year ago, and talk of secret meetings and leaked memos are adding fuel to the long-simmering fire.

First, we have a "Microsoft-all" memo from Steve Ballmer (courtesy of All Things Digital) in which the excitable CEO admits that "Apple is thriving" because "they are good at providing an experience that is narrow but complete, while our commitment to choice often comes with some compromises to the end-to-end experience." Having spent more than my fair share of time stumbling through arcane (if option-packed) Windows Mobile menus, I can vouch for that.

Ballmer goes on to say that "we're changing the way we work with hardware vendors to ensure that we can provide complete experiences with absolutely no compromises. We'll do the same with phones [italics mine]—providing choice as we work to create great end-to-end experience."

Huh—so is Ballmer just talking about Windows Mobile here, or is he hinting at something more?

Next, we get more grist for the mill from James Kendrick on jkOnTheRun, who claims he has "totally unconfirmed information" from an anonymous tipster that Microsoft is holding its first interdepartmental meetings about a Zune phone. According to jkOnTheRun, the "ZunePhone" will be touchscreen with multi-touch capabilities (not a shock, given Microsoft's Surface tabletop PC) and will run on a "specialized variant" of Windows Mobile 7.

Of course, these are just rumors, and keep in mind that many thought we'd have a Zune Phone by the end of last year. We're still waiting.

Personally, I'm surprised we don't have a Zune Phone already. Microsoft had a huge head start on Apple thanks to Windows Mobile, and as jkOnTheRun points out, Redmond already has solid partnerships with phone makers such as LG and HTC, as well as the big four U.S. carriers. And while the Zune doesn't do everything that it should (support for Xbox Live videos, anyone?), it has a slick, easy-to-use interface that would work nicely on a phone. Last but not least, all the iPhone hoopla is clearly driving Steve Ballmer nuts; you just know he's dying to take the fight to Apple.

Show of hands: Think we'll ever get a ZunePhone? Who here would buy one?

Related:
Microsoft CEO Steve Ballmer’s Full Memo to the Troops About New Reorg [All Things Digital]
Zune phone really in the works at Microsoft? [jkOnTheRun]