Zune phone really in the works at Microsoft?

ZuneThe success of the iPhone, both the original and the recently released 3G model, has fueled rumors that Microsoft is working internally on a similar phone built on the Zune audio player.  The Zune player has failed to compete against the iPod family as grandly perhaps as Microsoft wished but perhaps the folks in Redmond believe a phone version might change that.

We have totally unconfirmed information from a reader who wishes to remain anonymous that Microsoft is indeed working on a Zune phone.  This source had information about a meeting this week in Redmond that was planning a Zune phone to compete with the iPhone.  According to this information the Zune phone will be based on a specialized variant of Windows Mobile 7 and key functionality will be centered around WIndows Live Services.  On the hardware side the ZunePhone would be touch-screen based using multi-touch (surprise) but other than that not much is known.

This is definitely to be considered a rumor until Microsoft is forthcoming about the ZunePhone but this sounded credible to us and worth sharing.  According to our information this meeting is the first one at Microsoft held with all of the various divisions in attendance to make the phone a real product.  One thing is certain, Microsoft has all of the proper affiliations with phone manufacturers and carriers around the world so if they get serious about the phone they could easily bring this to market.  The timing of this alleged meeting is interesting as it coincides with reports of big shakeups in the Windows infrastructure at Microsoft.  As with all rumors take this one with a grain of salt.

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