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Zune Phone rumors: ringing true?

30 November, 2008 (20:11) | zune news | By: Harvey Chute

Several Zune phone rumors have surfaced over the past few days, pointing to a move from Microsoft to develop its own portable device to compete with Apple’s iPhone and RIM’s Blackberry products.

Is there substance to these reports? Well, let’s dissect what is known, and consider how well the dots connect up:

The Danger Acquisition. Microsoft bought Danger, the mobile Internet solutions developer, in April. (Danger developed the highly-regarded interface for T-Mobile’s Sidekick phone.) (Source: Danger, Inc.)

The Smart Phone Partner Constraint. Microsoft already provides its Windows Mobile operating system for an enormous number of smartphones. Those phones are made by independent hardware makers, like Samsung, LG, AT&T, HTC, and HP. (Source: Microsoft.) So far, Microsoft has not provoked these important partners by offering its own phone device.

Strategy: Own the Ecosystem? Despite its smart phone partner relationships, one has to wonder if Microsoft would prefer to handle the entire ecosystem of smart phone hardware, software, and services. Certainly it was that strategy that caused Microsoft to move from its software-only PlaysForSure digital media strategy, to its Zune strategy in which it controls all aspects of the experience. And it must be envying the end-to-end control that Apple and RIM have over their wildly-successful products.

Major Zune facelift coming up? Citing “a good source”, CNBC reported this weekend that Microsoft is preparing a “major facelift” to Zune players that could signal an evolution into a Microsoft smart phone. A prototype could be unveiled at the Consumer Electronics Show (in January), or at the 3GSM conference in February. (Source: CNBC.)

The Nvidia Connection? Sketchy reports are surfacing that Microsoft is designing a cellphone to use Nvidia’s Tegra processor. (Source: TGDaily.) Tegra is a new “system-on-a-chip” for mobile devices. (More info on Tegra here.) While this is being cited as a clue to Microsoft’s smart phone strategy, it seems to me that this could be a red herring - as Nvidia is also targeting Tegra at automotive applications, and it’s possible Microsoft is looking to build upon its vehicle-based Sync application in some way with Nvidia.

I’m not quite ready to call this one. But, unlike earlier Zune Phone rumors, I’m not ready to dismiss this latest round.

One thing I do know: I’m glad I’ll be at CES in Las Vegas this January… just in case Microsoft decides to drop some news (and a prototype?) on me.

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