No Zunephone insists Microsoft

Hardware manufacturers always insist that theyre not working on anything until around two weeks before the device theyve spent 12 months denying is due for release.
But Microsoft seems pretty keen to quash rumours of a Zunephone right where they stand.
Microsoft is not going into the phone hardware business. Microsoft is not building a Zune-specific phone, an official statement reads.
Quite what threat Microsoft feels from such rumours is a little unclear, however. Windows Mobile has legions of increasingly jaded fans, and the thought that the corporate giant - proven to be pretty adept at hardware design - was building itself a next-gen handset would be quite inspiring.
Of course, the wording is still a little vague. It does indeed look as though the failed Zune music player (designed to take on the iPod, but didnt) wont be revamped to test its mettle against the iPhone.
But as we saw in leaked pictures of Windows Mobile 7, that doesnt mean the Zune software and function wont be incorporated into a multimedia heavy operating system.