Crunchgear received what it calls a sound tip that Microsoft is working on its very own phone to be branded under the Zune moniker. Development has not begun but Microsoft has begun to work on strategies and timeframes to unveil such a device in time for the 2007 holiday season.
Details are slim but it is expected that the device would be a smartphone. Rather than running Windows Mobile thought, it would make use of an interface similar to the one on the current Zune. Synchronization with the Xbox 360 (e.g., movies) and video streaming are two capabilities that Microsoft would like to see on the new phone.
If Microsoft is just getting started, getting this done by Christmas might be difficult but they proved it was feasible with the original Zune.