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When is a Zune phone not really a Zune phone?

When you hear "Zune phone," what do you think that means? To some, it means a mobile phone that looks like a Zune HD media player, in terms of form factor and/or user interface. To others, it means a mobile phone that runs the current Zune music and video services. But what if means something else entirely?
Written by Mary Jo Foley, Senior Contributing Editor

When you hear "Zune phone," what do you think that means? To some, it means a mobile phone that looks like a Zune HD media player, in terms of form factor and/or user interface. To others, it means a mobile phone that runs the current Zune music and video services.

But what if means something else entirely? What if the "Zune" in "Zune phone" means everything from synchronization, back-up and updates, to renting and purchasing movies and TV shows -- in other words, something more like iTunes? (Remember those Zune VideoX rumors from a while ago?) Or what if it means nothing more than a Windows Mobile 7 phone that adheres to one of Microsoft's new chassis designs?

On January 26, istartedsomething blogger Long Zheng discovered that Microsoft included in its latest Zune software update drivers for three new Microsoft devices. These devices, as part of their identifying tags, include the words "Zune" and "phone."

Aha, cried the rumor-mongering hordes (including yours truly), trying to make sense of Microsoft's pauses and silences around Windows Mobile. Microsoft lied! There are Zune phones after all! And they're being made by Microsoft!

I don't think it's that straightforward or simple, unfortunately. I asked Interpret LLC analyst Michael Gartenberg for his take. He didn't (or couldn't) answer my set of specific questions about what this "Zune phone" was or wasn't. Instead, Gartenberg sent me the following statement: "(Microsoft CEO Steve) Ballmer has said publicly at the (October 2009) Engadget (show) interview that the next version of WM (Windows Mobile) would have some sort of Zune client but that's a far cry from a Zune phone."

Directions on Microsoft analyst Matt Rosoff was willing to be more specific in his predictions.

"I think these (newly identified "Zune phones") are Windows Mobile devices for consumers based on Windows Mobile 7, with narrowly defined hardware SKUs," Rosoff said. "Some internal (Microsoft) folks have been calling these Zune phones, but I don't think Microsoft will brand them that way. They will focus on digital media and gaming. I still think Pink/PMX (premium experience) are the clamshell-form Sidekick successors with a social-networking focus and have nothing to do with Windows Mobile or Zune."

Microsoft officials from Ballmer on down have been denying the existence of a "Zune phone" for at least three years. They've also denied Microsoft is going to make its own phone. There are lots of quotes out there to that effect. Here are just a couple:

From SF Gate, June 2008:

Q: Are we ever going to see a Zune phone?

A (Bach): "We don't make phones ourselves. We don't have any plans to make phones ourselves. Our focus is on the belief that a phone is a very personal thing. Different people want different types of phones. We think that is going to continue, and we think Windows Mobile is in a great position to service all those different opportunities."

From the Financial Times, January 2009:

"Asked if Microsoft would counter (Apple) with a 'Zune Phone,' Mr Ballmer said: 'You should not anticipate that.' He added that the company would stick to its strategy of developing software to support a range of mobile devices. That suggests that, if there is a future for Zune, it lies in planting the software and online service linked to the player in other devices."

As we Microsoft watchers know all too well, Microsoft execs are very good at finding ways to answer questions so as to leave open lots of loopholes for later denials. Notice Bach and other Microsoft execs still have not denied publicly that there will be a Microsoft-branded phone or phones. (But if there are, I'd say Bach is going to have some fancy footwork to do, in order to explain why a Microsoft phone doesn't hurt partners, while a Google phone does...)

I'm a little more hard-pressed to come up with a plausible explanation about the Softies' claim this past weekend that the Zune update due to be finished by this evening was nothing but a maintenance update. I asked specifically as to whether Microsoft would be adding any new features or capabilities having to do with Pink or rumored Zune phones -- I even went back and asked about Apple (as in Zune for a new iPhone or iTablet, just to be safe) with this update and was told to hold the conspiracy theories.

Update: I asked the Zune folks again, today, post the Zheng post, whether they considered the recent Zune update to be nothing more than a maintenance release. They are sticking to their story, believe it or not. From a spokesperson:

"The update was only maintenance and nothing consumer facing. As far as a 'Zune phone,' we have no plans to create a Zune phone. It makes sense that someday Zune could be part of a phone experience, but there have been no announcements about how or if that will happen."

Based on Zheng's discovery, I'd say it sure looks like the latest Zune update has something to do with whatever the Zune phone/Pink phone(s) end up being.

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