Gartenberg: Zune Phone Unlikely

by , 2:20 PM EDT, July 25th, 2008

A Zune Phone is unlikely, according to Michael Gartenberg with Jupiter Research. In his blog, he explained that the business model for Windows Mobile is totally different than for Zune. Even so, Microsoft may still be mulling over the idea as a way to better compete with Apple.

Mr. Gartenberg explained that while Microsoft's harwdare partners on the music side were taken aback by the Zune, ultimately they were still comfortable with the licensing. However, with a Microsoft phone, Mr. Gartenberg noted:

"The phone is different. WinMo is a core platform and OS. No one has ever been successful licensing technology platforms to others and then competing with a device of their own. Apple failed (twice), Palm and Nokia all tried it and it just can't be done. Microsoft now has traction with more than 20 million licenses out there and a great stream of partners and new phones for consumer and business use. A Zune phone from MSFT would potentially hurt all that."

In addition, Microsoft would face all the same problems Apple did before Apple finally sought a major wireless partner in AT&T. It's possible Microsoft might forge ahead, but the Jupiter Research technical director thinks it's more likely that some Zune functions will get folded into Windows Mobile.

If rumors are true, Microsoft has been holding exploratory interdepartmental meetings to discuss a Zune phone. On Wednesday, Steve Ballmer sent an e-mail to Microsoft employees describing how to better compete against Apple.