Is Microsoft in Pursuit of the iPhone?

Increasing Rumblings About Redmond's Phone Strategy

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The iPhone has everyone scrambling to come up with their own killer device, and the latest efforts are coming from Microsoft, if recent reports popping up in the blogosphere are to be believed.

Jim Goldman of CNBC says he has it on "good" source that Microsoft is looking to create a smart phone that builds on its Zune music player. Sounds reasonable. Microsoft has the parts: the music player, the operating system and Danger, the handset company behind T-Mobile's popular Sidekick QWERTY phone that Microsoft acquired earlier this year.

But any way you look at it, it sounds a lot less compelling than Apple leveraging the much more popular iPod for its iPhone. Zune is a struggling brand with zero cachet. (When was the last time you saw one on the subway?) It would take a lot for Microsoft to dissolve Apple's mindshare, with its first-mover advantage and sex appeal and all.

Still, all the signs are pointing to Microsoft cooking up something -- after all, it didn't acquire Danger for nothing. Speculation of many flavors has run rampant. A few weeks ago, Reuters, citing an equity analyst, floated the idea of Microsoft buying Research-in-Motion when RIM's shares got knocked down hard. Earlier this year, iLounge suggested that following Microsoft's purchase of Danger, it would be "folding the unit into the gaming and media device unit responsible for the Xbox and Zune."

In any case, CNBC said the phone, code-named "Pink," could be unveiled as soon as the Consumer Electronics Show in January, noting that a wide shipment release could be a year away. Another report by British import The Inquirer says the phone would be announced at the 3GSM event this coming February.
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