Okay so it might not be true Zune phone per se, but Microsoft does have designs to put Zune functionality in its Windows Mobile operating system soon. Microsoft CEO Steve Ballmer made the comments to British IT magazine CIO when asked why the company had created the music player in the first place.

“We built the Zune hardware with the Zune software – and what you’ll see more and more over time is that the Zune software will also be ported to and be more important not just with the hardware but on the PC, on Windows Mobile devices, etc.”

This is the first time that I can remember Ballmer specificially admitting the company had some interest in developing some type of “Zune phone.” All his previous comments, as far back as April of last year, have indicated the company had no interest.

I’d be willing to be the widespread success of the iPhone has changed that, and now with other competitors such as Nokia also moving to compete, not at least attempting to compete may be a bad idea for Microsoft.

Let us be clear here though: Microsoft is not going to develop or manufacture this phone themselves. But if these statements are to be taken at its face value, it sees to indicate Redmond will not stand in the way of any manufacturer who may be interested in launching a Zune phone.,

 
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Read more: Steve Ballmer, Windows Mobile, Zune