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.
If this rumor proves true, it will be interesting to see how Microsoft plans to sway attention away from Apples iPhone. One aspect that would prove useful is the ability to choose multiple providers, nothing like the slim selection that Apple currently offers. Info on the “Zune Phone” is scarce, so no price point is yet available, but it would not be foolish to assume it would fall in line with the direct competition in the $500 – $600 area.
Source: Crunch Gear