Rumours have been doing the rounds recently that Microsoft might be working on a Zune phone. The Zune, if you recall, is Microsoft's iPod-killer MP3 device that singularly failed to kill any MP3 player, let alone the iPhone. According to the rumours, the Zune phone is meant to be Microsoft's answer to Apple's forthcoming iPhone (and if it's as bad as the Zune itself, Apple won't exactly be losing any sleep!)

Now Microsoft's Steve Ballmer has categorically ruled out a Microsoft Zune phone...but he didn't rule out a Microsoft phone either....

Normally never one to mince his words, Ballmer came out and, well, minced his words! In fact, this is what he had to say on the Zune phone:

"[The Zune phone] is not a concept you'll ever get from us. We're in the Windows Mobile business. We can put Zune into Windows Mobile, we can put Xbox into Windows Mobile. We can pour everything in. We wouldn't define our phone experience just by music. A phone is really a general-purpose device. You want it to make telephone calls. You want to get and receive messages -- text, e-mail, whatever your preference is. You may want music, you may want to play games, you may want to carry your contacts with you, and you may want to pay for things. I think we have to think about the phone instead of as a fixed-function device, a phone is really kind of a general purpose device that we need to have clean and easy to use."

The important bit of this statement is Ballmer's claim that "We wouldn't define our phone experience just by music," which rather implies that Microsoft has a clear idea of what it's phone experience will be like, hinting that, perhaps, Microsoft are actually working on a Microsoft phone of some sort.

From the sounds of it, such a phone could come with any kind of gadget you'd care to mention. Zune functionality, XBox playability, whatever it is you want your phone to do.

Now add to this a few intriguing bits of news that have emerged this past week, and we might have a clear idea of what Microsoft's plans are in the phone arena.

Microsoft Mutli-Component Gaming System patent

Firstly, a recent Microsoft patent has been unearthered that describes the design for a completely distributed home entertainment centre called the Microsoft Mulit-Component Gaming System (MCGS). The MCGS comprises a central hub (the games console) that can connect to any home entertainment device (e.g. HDTV or theatre system), together with a plethora of different handheld devices, including handheld games consoles, PDAs, MP3 players, and mobile phones.

The MCGS enables the free transfer of content between these devices, together with the ability to share hardware resources (such as memory or spare CPU capacity).

In order for such a system to work, Microsoft would need compatible handheld devices, which it doesn't have yet (apart from the Zune). It's only options would be to develop such devices itself, or to release a reference model that defines the features needed to interoperate with the MCGS, and let other manufacturers build these devices based on the reference model.

Microsoft and Samsung partner up

Another bit of interesting news is that Microsoft recently agreed to swap patents with Samsung, who, among many other things, have an awful lot of knowledge on making handheld devices - including, obviously, mobile phones.

So my hunch is that Microsoft will either release its own mobile phone along with other handheld devices (such as a Windows Mobile-based handheld XBox) using technology from Samsung, or else will release a reference model for the MCGS's handheld devices, and let Samsung (and others) build the devices in the same way that Toshiba built the Zune for Microsoft.

Whichever is right, it would seem that a new Microsoft phone of some form is clearly on the cards in the coming months, together with a variety of other interesting handheld devices.

Microsoft has no option but to develop the MCGS if it wants to compete with Sony, as you can bet the PS3 will evolve similar features as it matures, and Sony has a headstart in that it already has dozens of handheld devices already on sale.

The battle for home entertainment

Whoever is first to build a successful MCGS-like system will not only own the home entertainment market, they'll pretty well seal up the entire handheld device market as well. Given that Microsoft has pledged its software to be in every home in the same way that its goal was for Windows to be in every PC, this is one competition the company can't afford to lose - and that means that a Microsoft phone is a near-certainty.

Sony, of course, could easily counter such a system just by releasing a PSP phone, but given Sony Ericsson's lack of innovation lately, this may never see the light of day, giving Microsoft the opportunity to come out with an XBox phone.

Who knows? This is, of course, just speculation. But with Microsoft partnering with Samsung, and Apple's iPhone forcing Microsoft's hand in the mobile arena, something mobile-related from Microsoft is surely on the cards.

Interest times indeed!

[Source: MediaMentalism, Gizmodo, Samsung]