MWC: Microsoft To Launch Zune Phone?

Microsoft could be preparing a phone based on its Zune MP3 player at the Mobile World Congress in Barcelona this month, according to a Spanish blog.

“Today we can confirm the existence of the Zune Phone from Microsoft,” reads a rough translation of the Jan. 27 post on the MuyComputer blog by Gustavo de Porcellinis. “Today we can confirm that the phone will be presented at the Mobile World Congress in Barcelona and that the device will be based on Nvidia’s Tegra platform, which will accompany Microsoft in the coming-out.”

The post goes further, describing a 2.4-ounce device with 480 by 272 screen resolution. “We could not confirm whether the device is equipped with the new Windows Mobile 7, but all indications are that it will,” the writer said, translated.

Zune phones have been predicted before, so how accurate is this newest rumor? According to one source, it’s on the proverbial money: Jesus Diaz of Gizmodo wrote, “I’ve been a close friend of Javier [Perez Cortijo, MuyComputer editorial director] for a couple of decades — he was my first editor — and I completely trust his sources and his judgment, so this is a good one.”

When contacted by eWEEK, a Microsoft spokesperson gave the standard response, “Microsoft does not comment on rumours or speculation.”

Nonetheless, to entertain the hypothetical for a moment, it seems possible that an update to Microsoft’s smartphone operating system would include Zune-branded multimedia functionality, especially considering Microsoft’s attempts over the previous year to pivot the Zune’s image toward that of a linked group of cloud-based entertainment applications as opposed to it being a dedicated hardware device.

That being said, it seems unlikely that Microsoft would brand a smartphone with the Zune name, considering Zune market share in mid-2009 hovered around 2 percent.

Microsoft’s other big consumer brand name, Xbox, would likely be an unacceptable one to staple onto a smartphone. Therefore, while it seems a solid bet that the Zune platform may find its way into the Microsoft Windows Mobile experience as an application of some sort, is far less likely that a Zune Phone is in the works.

That being said, Microsoft is indeed preparing to unveil something mobile-related in Barcelona. During an earnings call last week, Microsoft chief financial officer Peter Klein said “the next version of Windows Mobile” will be talked about at MWC. Both Klein’s and other Microsoft executives’ comments over the past month, however, have been vague about whether that “next version” will be Windows Mobile 7, or else the newest update to Windows Mobile 6.5, which made its debut in October.

According to one analyst, Microsoft may also debut a branded smartphone either at MWC or else at March’s CTIA in Las Vegas.

“We expect Microsoft to debut its long-rumored ‘Pink’ phone within the next two months,” Jefferies & Co. analyst Katherine Egbert wrote in a January research note. “We believe the phone will be based on Windows Mobile 7, which has not been made generally available.”

Interestingly, Egbert seems to agree with Cortijo on the potential Zune aspects of such a device, stating, “We think Microsoft is partnering with a few OEM manufacturers to create the Zune-like phone, which includes 720p HD [high-definition] video and at least a five megapixel camera.” On top of that, Windows Mobile 7 could include services such as “a Zune video store and music subscription [and] purchasing” in addition to “social networking apps like Xbox Live, Facebook and Twitter.”

The image (above) is a Web mock-up that circuilated on blogs in 2008, with a Windows Mobile screen pasted onto a Zune device.

Reports from throughout 2009 indicated that Mobile 7 could make an appearance late in 2010 as part of a broader Microsoft attempt to reverse its eroding mobile operating system market share. While some rumors have suggested that Mobile 7 could be delayed until 2011, neither Microsoft nor potential handset manufacturing partners have commented on a potential time frame for the operating system.

However, incremental advances are being made to Mobile 6.5, and Microsoft and Sony Ericsson are reportedly planning to produce a smartphone that runs Windows Mobile 6.5.3.

Another factor in the launch could be Sidekick, a smartphone brand owned Microsoft picked up when it bought its owner, Danger Inc. Despite a very “hip” image, the Sideckick brand was tarnished when Microsoft lost customer data through a back-up failure in October 2009