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by Mike Zazaian September 15, 2006 - 5:11pm, 1 Comment

Microsoft's upcoming Zune Phone

As with the Zune itself Microsoft hasn’t announced any pricing or release schedule, but an official announcement today confirms a new Media Phone based on Microsoft’s Zune just hours after iPhone rumors leak.

According to the Microsoft Zune general manager of global marketing, Chris Stephenson, the company will release a media-enabled phone based on the Zune WiFi personal media device that was announced yesterday. Stephenson failed to mention, however, when the Zune Phone might hit shelves or for how much.

Zune packagingSpecs on the Zune Phone are also under wraps, except to say that it exists and will eventually be produced. If the Zune itself is any indication, a Zune Phone would likely include WiFi music-sharing capabilities. And as Apple’s iPhone is speculated to allow users to download songs from iTunes directly to the phone, a feature that a Zune Phone would likely use in conjunction with Microsoft’s new iTunes-inspired Zune Marketplace.

Interestingly the announcement comes on the same day that rumors of a January 2007 launch for Apple’s iPhone began to circulate.
Albert Lin, a market analyst from American Technology Research speculates that the rumored iPhone has been in development for a while, but has likely been stalled because of snags in production.

We believe this smart phone has been in development for over 12 months and has overcome substantial challenges including design, interference, battery life, and other technical glitches. As we have seen in the smart phone space, it is very difficult to produce a converged product of high quality

It’s also possible that the powers that be at Apple don’t want to rush iPhone to market, as they’re aware what an enormous boon it could financially for the company. Lin further speculates that

If the phone fetches $200 apiece and manages to capture about 1% of the market, or sell 10 million phones, Lin sees the iPhone contributing $2 billion in annual revenue to Apple.

Microsoft's Zune media playerOne wonders if Microsoft, citing the trouble that Apple has had with production of the iPhone, is scrambling to get a leg up in the newish media-phone market. If that’s the case, we’ll see if Microsoft’s first-come-first-serve mentality will trump Apple’s more calculated tortoise-and-the-hare approach. Perhaps Microsoft learned from Apple’s triumphant iPod release that the first product on the market usually claims the largest market share. Unfortunately the lack of any specifics from either Apple or Microsoft makes it difficult to even speculate on the matter, but we’ll keep you updated if any new info leaks out.

[via ars technica]