Bill Gates rules out Zune phone

When the Zune came out two years ago, Microsoft talked openly about the possibility of the Zune lineup being extended with a cell phone. Early last year, however, Steve Ballmer suggested a Zune phone was no longer part of Microsoft's plans. Apple's iPhone has gone on sale and become a hit since then, but according to a statement made by Microsoft Chairman Bill Gates in an interview with a German publication, Microsoft hasn't changed its mind.

Reuters says the Frankfurter Allgemeine Zeitung asked Gates whether Microsoft would launch a product to compete with the iPhone. Gates replied, "No, we won't do that. In the so-called smart phone business we will concentrate solely on software with our Windows Mobile program." He added, "We have partnerships with a lot of device manufacturers from Samsung . . . to Motorola . . . and this variety brings us significantly more than if we would make our own mobile phone."

In short, Microsoft and Google are both taking the same approach to competing with the iPhone. Microsoft has Windows Mobile, and Google will rely on its Android platform.

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