It's funny how the echo-chamber story of a zune phone goes round and round. The interest in the idea of a Zune phone, tightly integrated services and device form factor, escape comment in every story which focuses instead on the red herring of "will Microsoft make an own-branded device".
No Zune phone at CES, says Microsoft | Register Hardware.
The larger questions Microsoft has to answer: How will Live services overlay or fit with the increasing tendency of partners to layer their own UI on WM? How will the WM roadmap, and its downward compatiblity (or not), reach into the existing WM installed base? Who will mediate competing operator and device vendor services which compete with Live services?
Microsoft could carve out some interesting space in the market by extending XBox and Zune services into Windows Mobile features. But even there they run into some fast-developing challenges.
In particular, by the time Microsoft's Skymarket app store is out the same devices may well have operator or device vendor stores. Will they co-exist? Will the service provider ultimately decide? Will Microsoft support their app store with demand generation for partners?
