Would Zune 2.0 pack a phone?

The Zune music device was supposed to be Microsoft's iPod killer. Now comes word that Redmond may try to make it the iPhone killer.

Bloggers were agog about reports that Microsoft is planning a Zune phone, which could be ready in time for the 2007 holidays. CrunchGear quotes a tipster saying it would be a smart phone that works with the Zune marketplace, and would not run Windows Mobile.

The report also claims the rumored device would be able to sync with the Xbox 360 and stream video from the game player to the phone.

The Zune didn't have quite the impact that Microsoft was hoping for this past holiday season. Is there any chance a Zune phone would do better?

Blog community response:

"If true, we can't exactly fault Microsoft for taking its telephony destiny into its own hands, but one does have to think about those poor souls who are betting the farm on Windows Mobile."
--Om Malik

"Every major PC manufacturer is, post-iPhone, working on an integrated telephony product, and Microsoft's maybe-eventually entry shouldn't have anyone quaking."
--Paul Kedrosky's Infectious Greed

"I'm not sure if this rumor has legs, but if it does - given the fact that the Zune was essentially stillborn, regardless of what sales polls say - the idea of a Zune phone just seems downright preposterous to me. There is nothing in the market or tech zeitgeist that should be seen as encouragement to MS to build something like this."
--Graceful Flavor