An analyst report on Monday sparked renewed speculation that Microsoft may soon unveil the long-expected "Zune phone." Jefferies & Co. analyst Katherine Egbert says she expects Microsoft to unveil a phone in the next two months, perhaps at the Mobile World Congress, which runs Feb. 15 to 18 in Barcelona, or at CTIA Wireless in Las Vegas March 23 to 25.

Microsoft reportedly is making the phone similar to the way Google created the Nexus One-by working with phone device manufacturers on the construction and guiding the complete design of the software internally.

That software will almost certainly be based on Windows Mobile 7, and feature many of the Zune's key features. Those include a video store, music subscription service and Xbox Live integration, along with access to other social networking services like Facebook and Twitter.

This isn't the first time rumors of a Zune phone have come to a head. Ever since Microsoft first unveiled the Zune device and music service, speculation has run rampant that the company would inevitably create a branded phone to compete with Apple's popular iPhone. But Microsoft has consistently denied such rumors over the years.

Some of the rumors stem from confusion over what Microsoft's mobile strategy is. The company has held the line for years that it only wants to provide technology to handset manufacturers that allow them to make their own phones, not compete with them in the sector directly.

But with the dramatic impact of the iPhone from Apple, and Google's recent entry into the market with the Nexus One Android phone, Microsoft could be forgiven for changing tack and planting its flag in the mobile ground more firmly.

Questions? Comments? Let us know: @billboardbiz

Print