Microsoft’s Steve Balmer doesn’t know if the Zune is coming or going. The portable media player hasn’t knocked the iPod off its perch in its two-year run, and now Balmer recognizes that it may never.

Microsoft thinks that the market for stand-along media players—iPods, Zunes and the like—isn’t likely to see much growth going forward. That is, as most of us move onto smartphones that have multimedia functionality built-in—again, like the iPhone—we won’t be spending as much money on stand-alone players. Why would we, especially since we’re one more bank failure away from a barter economy?

The logical thing, then, would be to make a Zune phone. Only Microsoft won’t. That is, we shouldn’t “anticipate” a Zune phone. Instead, Microsoft sees software as its best bet into making a buck off the music business.

Perhaps Microsoft should have told some of its MacBU guys to create a proper Zune software solution for us Mac users. That would have gone a long way to convince to try it out, rather than thinking, “Bah, they use Macs they’ll never use a Zune.” Nice defeatist thinking.

Photo: Flickr

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.

The supposed Zune phone would address the complicated interface, limited media capability in a time of device convergence, and completely rebrand Microsoft in the mobile market. The Zune interface is attractive, of course, but not really applicable to the mobile experience yet; however, I know people on the team and they are certainly capable of adapting the design ideas to a touchscreen-based, full-service mobile phone.

And what about the killer app? A mobile social network of friends and like-minded music lovers who can fire songs to each other over a nationwide network? How unbelievably awesome would that be?

“Message from James! ‘Check out this new Wolf and Cub song’ – Listen/Download/Buy”

Seriously, it’s not only possible but totally a good idea, and possibly necessary for a continued MS presence in the mobile world. I don’t think we’ll have a product before 9 months from now, but I certainly wouldn’t say a Zune phone announcement (or at least a hint) out of the question.

Look at the mobile world now. Apple is clearly the rising star with its single, $199 device. The touchscreen phone is the de facto standard for every smartphone/touchscreen device and the App Store has shown company’s how to make a successful content distribution system. But the Zune has Microsoft’s backing and while Windows Mobile hasn’t broke free from its niche market, the Redmond-based company did develop a killer media player in the Zune.

The Zune hasn’t seen iPod-like success but most gadget feigns that give it a try find the Zune is, in fact, vastly superior to the iPod. The interface rocks, it has extra features like an FM Tuner and mesh network song sharing, which all shows that Microsoft really does know how to design a forward-thinking gadget. Plus, Microsoft now owns Danger, the company that developed the Sidekick.

Microsoft scooped up the mobile platform maker for $500M early this year and you had better believe that Redmond didn’t dip into the slush funds for nothing. The T-Mobile Sidekick is a killer device with tweens to hipsters still rock’n the slider and that market happens to be the key demo for a ZunePhone. Apple went after the geeks and freaks initially with the iPhone but quickly the masses found salvation in the device and that’s what Microsoft must do as well.

Skip Windows Mobile; it’s dead. The best WinMob phones skin the OS and hide it below the surface. If the ZunePhone is to succeed, the device cannot be powered by any current version of Windows Mobile and hopefully, that’s why Microsoft bought Danger. The original Sidekick had an innovative UI and that’s what Microsoft will need to compete against Apple and Google. 

Now that the Android-powered G1 is here, Google is also in the mobile world and licensing-out Android to manufacturers like Motorola and Nokia. The G1 might never hit mass appeal outside of the techno-geek arena but next-gen Andriod devices should have a wider appeal.

Microsoft has a challenge. The Zune is an amazing PMP and the world could benefit from another killer mobile phone, but whatever is made, the general populous and Mac Zealots alike will throw it into the ring with the iPhone. But just like the iPod and Zune battles, Apple has a significant advantage of coming to the market first and working all the kinks out over different generations. Microsoft’s first ZunePhone would be compared to Apple’s second – or third – iPhone; that’s just the way it is.

Hopefully this rumor turns out to be true and we do see a ZunePhone sometime soon. Don’t hold your breath though as similar rumors have appeared and gone away over the years with no results. If there were ZunePhone coming, where are all the obligatory blurry camera phone pics? Those simply must leak to the Internet prior to any launch.

Check out MobileCrunch for more scoop.

Metaphors aside, the news is that Zune content may be coming to Nokia. This comes from “a well-placed source in Microsoft,” which probably amounts to a guy in package design seeing a Nokia phone sitting next to a Zune somewhere. If it is true, it might be interesting, as everyone saw a Zune phone as something that might piggyback on a WinMo platform, but that obviously wouldn’t happen at Nokia. Whether that makes the rumor more or less compelling is a matter of taste.

What MS needs is a hit of a handset, something to fight back at the iPhone. We all know this, and the Zune is a great place to start. So where’s the Zune Phone? More on that later.

J Allard, the Microsoftie in charge of the Zune group (hey, J!), said in a recent Reuter’s interview that there were no “immediate plans” for a Zune Phone, but then confused us by mentioning that the underlying OS for the Zune is the same as that used by Windows Mobile. Very interesting indeed.

We know that a Zune Phone is in the works, and rumors around Seattle persist that there are prototypes in the wild. And while we’re normally quite good at tracking these down, we’ve had no luck here. But we’ll keep trying, and we’ll let you know what we’ve found.

Microsoft’s Allard: No Immediate Plans For Zune Phone [mocoNews]

What if the Zune was a cell phone? What if it had a touch screen on the back of it? What could you do with it? Microsoft slipped in a patent application covering a cell phone that can be used as a touch screen computer mouse for your PC. After searching on the topic, we’ve uncovered Microsoft-two-sided-cell-phone-touch-screen-control-your-PC-by-WiFi patent application goodness. Whew, details after the jump…

This discovery comes on the back of the re-surfaced Apple Zune-like, [ninja fighting] patent application hype last week that John and I discussed. Can there be more things connected on this patent application? Not likely.

Here’s what they’ve claimed:

1. A system that facilitates navigating on a display, comprising: a mouse engine component that detects a location; and an interface component that integrates the mouse engine into a handheld communication device.

Short and simple.

Let the race begin between Microsoft and Apple in the cell phone arena. Sit back, grab a drink, this is likely to get really interesting even if some of these patent applications are getting a bit silly.

http://crunchgear.com/2007/05/07/breaking-zune-event-news-zune-phone-flash-based-zune-dont-exist/

We’d heard rumors around the Internetings that today Microsoft would be disclosing a major announcement today regarding Zune. Our top source indicated that if there was anything today, it’d be the confirmation of the Zune Phone. We also hear it would instead pertain to the oft-mentioned flash-RAM-based “Zune Mini”. As it turns out, it’s a little of both. We’ve spent the last 44 minutes talking with the powers that be in Redmond, and they’ve given us quite a shocker.

Despite what we’ve heard to the contrary, we can now say that there is no such announcement from Zune today. Nor was there. Both of those rumors are equally wrong, sorry. Someone started a rumor, and it got legs. This is what happens when you’re irresponsible on the Web, people.

When we pinged our man Cesar at Zune Insider earlier today, his response was perfect:

Dude. Can you print this in big bold font:

Not every Zune rumor on the internet is true.

;)

No I’m just kidding, but seriously I’m not sure how these things start :)

We know how. Someone on some fanboy site was wasted over the weekend (Cinco de Mayo, yah?) and decided to start some sparks. Thanks to that person for getting everyone all excited. You are a jerk.

Just so you don’t feel like your time has been wasted (it has), here is a video of an adorable kitten giving another kitten a massage.

The UI appears to be tiled and whatever it is you wish to see will be brought to the forefront whilst everything else stays in the background. I think it kicks much ass and definitely adds a unique UI to the market that looks very easy to use. Again, we shall see what happens and if this actually materializes. I, for one, cannot wait.

Patent [via Mad4Mobile]

Start your professions of lust below.

A WiMax Zune Phone? [DSL Reports]

With 3G on the rise, 4G is still the far future. With popular providers like T-Mobile still struggling to put out their 3G networks, anything beyond is sci-fi. A little digging, however, and we found this press release from August of last year, in which Sprint/Nextel announced its plans to build out a 4G network based on the IEEE 802.16e mobile WiMax standard. The 802.16 standards use OFDM, the exact same modulation protocol as the Microsoft device in the FCC filing.

Beginning to get the picture, yes?

If this all fits together, it looks like MS is working on a mobile WiMax-enabled Zune Phone, which would have download speeds of up to 2Mbps, fast enough for the Xbox-to-Zune streaming we’ve heard about, and fast enough for just about anything else the Zune Phone might be used for.

So now that we know that the Zune Phone is real, and that it’s in development, what else can we say about it? Tons.

The first real news is that we can expect to hear an announcement from Redmond about it before March 17, St. Patrick’s Day, at which time we should learn the name of the device. At the same time, we should also learn other launch specifics, and here’s where it gets incredibly juicy; our source says that, pending FCC approval, the specter-like Zune Phone will hit the streets sometime in May, a full month before the iPhone.

No, really.

Our source says that an iPhone competitor has been in the works for a while, and the idea of branding it as part of the Zune ecosystem, from the brown color through the interface, came as a recent decision as a response to Apple’s iPhone. The source didn’t go into details about features, as they don’t know specifics—they’re not yet all finalized. But there is one thing our source says will not only separate it from other music phones, but from iPhone as well.

Without a doubt, the biggest root of contention with the Zune users isn’t the hardware (which is very good) or the marketplace (which is likewise awesome), but the lack of other users to share music with. The WiFi sharing capabilities were the unique feature that was supposed to set the Zune apart, but unless you had another user in the area with sharing turned on, it was wasted battery, even in airports or Midtown Manhattan. (I’ve still yet to find a single person to share with. – Blake)

The Zune Phone remedies this by allowing you to share music not via WiFi, but via WiMax, so that anyone on your friends list who is online can sample your music, and vice versa. By using the mobile WiMax network, you can be in New York and your friend can be in San Jose and you can send him that Shins song you like.

By taking the proximity limitations from an otherwise sound idea and reversing them macro-syle, Microsoft opens up the Zune experience to everyone, making the ecosystem reach from coast-to-coast. The Social, as they say, goes national. We love the idea, as it really frames the concept of portable social networking in a wide, wide light.

This is a lot of information, and the reader should keep in mind that any part, if not all of it could change, as from what we know, the Zune group is just being brought up to speed on the specifics of the device. Our sources are saying that some of the hardware has been in development for quite awhile, and that the idea of making it a Zune device is relatively new.

With the iPhone having been in the rumors stage for almost two years, it makes sense that MS would have started a response as a contingency. Now that iPhone is out, and Redmond knows exactly what it’s up against, it’s an relatively easier process to finish an alternative, and bringing it to the Zune team and its Gen-Y marketing is the icing on the cake.

Of course, much of this is conjecture, but it’s logical. What’s more, our sources have never let us down and are from diverse backgrounds involved with Zune from the get-go. This is a well-thought-out response to iPhone, works perfectly with MSN Live Spaces, as well as Xbox.

We’re not entirely sure yet how much of this is going to hit, but it’s on our radar, and we’re guessing that now it’s on yours, too.

Zune Phone hits FCC? [Market Watch]

Call Center Awarded (Zune?) Phone Support Contract [Zune Scene]

We’ve just received a sound tip that Microsoft is working on its very own phone to be branded under the Zune moniker. Our tipsters inform us that Microsoft execs are in meetings today hammering out details of the device and developing strategies and timescales for its release.

Seeing as that the development has hardly started, little is known yet about the Zune Phone, but there are some details that seem solid thus far.

This is what we know:

It will be a smartphone that works homogeneously with the Zune marketplace. It will most likely not, however, run Windows Mobile. Rather it’ll make use of an interface similar to the current Zune, an interface that I consider among the best available on audio players—I’m sure it can transition to a phone easily.

Connectivity is the major concern of the device. It is said that it will be able to sync with the Xbox 360 and stream video from the system to the phone via a wireless data connection. This would be pivotal in Microsoft’s proliferation of its media ambitions. Not only does it already have millions of 360s in homes capable of downloading movies, it’d be able to distribute those videos directly to its phones. Cool stuff.

The other detail that seems certain at this point is that the device will, if things go as planned, be available for the ‘07 holiday season, which seems like a decent time line. That gives Microsoft about nine months to get everything together, an entirely possible feat.

With the Apple iPhone is set to drop in June, and the Microsoft Zune Phone near December, this year is gearing up to be highly prolific for the cellular industry. What effect do you all think this will have on the scheme of things? Who do you think will deliver a better product (and I don’t want “just because” answers)? Rational thought here, please.

This information is as definite as tips can be.