Although we speculated about the possibility of a Zune phone coming soon (and were subsequently shown the error of our ways), the Zune/phone divide is in fact narrowing, as Ballmer said would happen. But it’s not a “port” as he mentioned; rumor has it that members of the Zune UI team are actually moving to the Windows Mobile team, for what nefarious purpose I will let you imagine yourself.

If I had to guess myself, I’d guess that within a few months there will be a somewhat clumsily-implemented Zune-on-WinMo setup that will be polished into a far more usable product by mid-year. A Zune layer on top of the new WinMo? An emphasis on device convergence and a full-featured Zune function on some sweet new phone? Who knows? The Zune team is talented and with luck will be doing more than a simple port job.