Zune Phone Rumored to Appear at CES 2009

After years of rumors and brusque denials, it appears the Zune phone is the real deal.

According to Trip Chowdhry, an analyst at Global Equities Research, Microsoft CEO Steve Ballmer will announce a Zune-style mobile device during his keynote address at the upcoming Consumer Electronics Show in Las Vegas, on January 7, 2009.

In an article in Barron's, Chowdhry claims that the company's new centerpiece will combine the best features of the Zune media player with the hardware design of Danger's mobile Sidekick, in addition to "motion enhancement features," like an accelerometer.

Basically, this means the device will come with a physical keyboard like HTC's G1 and will likely feature a larger screen to accommodate heavy multimedia elements. And since we're all here copying each other's mobile phone features, we'll be shocked if the Zune phone doesn't feature multitouch capabilities.

This report seems to confirm an earlier one revealing that Microsoft was working on a phone code-named "Pink."

It's a long way from Ballmer's original statement in April 2007 regarding the iPhone: "It's not a concept you'll ever get from us. We're in the Windows Mobile business."

In fact, this was always the excuse Microsoft gave as to why it couldn't build a phone -- its WinMo business was too successful and it couldn't afford to cannibalize the market. This year, Microsoft's WinMo profits are expected to be near $300 million in revenue.

Not bad if you can shake that amount of cash, but it seems positively paltry next to the $4.6 billion in revenue that Apple just made in the last quarter from its iPhone sales.

If Microsoft releases the Zunephone within six months of a January announcement, it might also mean that Windows Mobile 7 will be available to its hardware partners within that time. No one wants to be played for a fool, and the imminent Zune phone would cut into their profits.

The pre-Zunephone timeline reveals MS' unwillingness to reveal its plans. In September '07, a Microsoft rep warned that expecting a phone from the company was "not unreasonable."

In the intermittent 15 months, however, the company limited its enthusiasm and its leaks. Several top executives consistently batted down rumors of a full-on Microsoft phone. In January '08, Bill Gates simply said "No, we won't do that."

Then, this past summer, a leaked internal e-mail by CEO Steve Ballmer strongly suggested Microsoft was working on a phone: "We're changing the way we work with hardware vendors to ensure that we can provide complete experiences with absolutely no compromises. We'll do the same with phones."

By October 2008, Ballmer was revealing that the software used on the Zune was ready to be ported to PCs and to Windows Mobile devices. Some believed he was admitting that the WinMo system was flawed and that a phone version of the well-received Zune UI was the next logical step.

Add the chatter that revealed that NVidia is making a special chip purely for a mobile Microsoft product, and it's pretty clear the Zunephone is at hand. Or is it?

One way the rumors could turn out to be true while allowing for Microsoft's continual denials would be for the mythical phone to instead be a web-enabled portable XBox Zune, for gaming.   

Either way, here's the one question we really care about: Will it squirt?

by Jose Fermoso

Also on Wired.com:
LimeWire Adds Private File Sharing
Netgear Set to Take on Apple TV
Gallery: 40 Years of Mighty Mice

Subscribe to Wired magazine