Ah rumors. Microsoft may or may not have had a meeting this week about making (or not) a Zune phone. True or not, either way the idea is interesting for sure. What if Microsoft released a 3G phone to directly compete with the iPhone?
According to Michael Gartenberg the prospect is not likely.
Citing that Windows Mobile is a core platform and OS, he points out that by releasing a phone, Microsoft would be in direct competition with other makers who had licensed the platform. Currently there are over 20 million WinMo licenses out there.
He goes on to say that the idea is not out of reach, just highly unlikely. Rather, he sees it the other way around with mobile Zune functions ending up in the Windows Mobile platform.