As iPhone fever subsides, the world asks will there be a Zune phone?

Zune, Zune, Zune

As reporters and analysts run out of things to say about the Apple iPhone, they naturally need to keep the debate rolling, and have this week turned to the possibility of Microsoft's involvement in MP3 phones, by inventing the Zune phone.

Microsoft executives failed to deny its existence and even said that “somewhere on the horizon this brand will have a phone in it,” and that’s enough for the rumor mill to go off once again. The truth is we still don’t know what's in an iPhone and won’t until it’s been delivered, although most have settled on either an XScale chip from Marvell, the company that Intel sold its XScale architecture to, or a Samsung built ARM core chip, which seem reasonable guesses.

But Zune and Microsoft are only the natural enemy of all things Apple, in the mind of analysts, if not the public. The Zune player has been largely ignored by retailers and consumers alike and its sales numbers, where reported, are hugely disappointing.

But the big success in the world of Microsoft devices is the Xbox, and while we still expect it to be overhauled by the Sony PS3, it will not be pushed aside like the previous generation of Xbox device, and we still have yet to see a portable Xbox, potentially under the Zune brand. So why shouldn’t a Zune phone it also play video and music and attach to the Xbox as its home base as well as connect directly to the Zune Marketplace for music.

Some commentators are suggesting, as they did for Apple’s entry into the handset market, that Microsoft will opt to offer its own MVNO. Other’s say that the handset will NOT use the Windows Mobile operating system. We doubt that both of those statements can be true. If Microsoft runs an MVNO, why not use it as an advert for the handsets it already makes. If it doesn’t then it should accept that is doesn’t dominate the handset market and build a platform above the operating system level.

The only issue we have with all of this is with the timing of reports that say that the device will be out in time to spoil Apple’s first Christmas in the stores. Apple’s iPhone will be out in the US in June and in time for Christmas in Europe. It has taken Apple a considerable amount of time to design this device, as long as two years, and while Microsoft has a head start in designing handset operating systems, it will take a similar amount of time to solve all problems associated with bringing such a device to market, so we’d pitch it as coming after the portable Xbox design, if it ever appears at all.

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