Microsoft to Release Zune Phone?

There’s been a lot of buzz lately about Microsoft’s [NASDAQ:MSFT] new, if belated, campaign to get reluctant users to adopt Vista. What they’re doing is the ol’ on-camera switcheroo: filming “real” users reactions to a “new” operating system they call Mojave, and then revealing that Mojave is really Vista. The users are supposed to swoon and say things like, “wow, I’m so closed-minded, I had no idea Vista was so great.” Or something.

Anyway, a lot of tech pundits have picked up on this “real-world” ad campaign as somethig that smacks of Apple’s [NASDAQ:AAPL] “real people” iPhone ads earlier this year. Indeed they do, but Microsoft hasn’t stopped there when it comes to pilfering Apple strategies. A new memo leaked out of Redmond this week shows Steve Ballmer suggesting to his underlings that perhaps the MSFT approach (ie, we make the software, you make the hardware) is inferior to Apple’s end-to-end hardware/software approach. He says:

changing the way we work with hardware vendors to ensure that we can
provide complete experiences with absolutely no compromises. We’ll do the same with phones—providing choice as we work to create great end-to-end experiences.”

What he seems to be alluding to here is the idea of making a Zune Phone (or an equivalent, wholly MSFT-made phone device). Since Microsoft is a fan of collaborating with and/or buying other companies with expertise, its doubtful that the whole device would actually be built in house; what Steve is referring to here is the opportunity for Redmond to have complete control over a Windows Mobile-based device from inception to production. If that happens, it could actually pose a threat to the existing titans of the consumer smartphone space (ie, BlackBerry [TSE:RIM] and Apple), since Microsoft’s hardware savvy is actually pretty darn surprising (see the terrific-if-underselling Zune).CD