Apple's iPhone may still be a rumor, but Microsoft's Zune phone is definitely not. Zune GM Chris Stephenson confirmed at a press conference that a Zune phone is indeed a part of the Zune line of products that are yet to be announced. Microsoft has been in the phone software market with Windows Mobile for a long time, so it would leave very little to speculation that the Zune phone would also be a Windows Mobile 5.0 Pocket PC powered device, given the 240x320 resolution screen, but that's assuming they use the same platform for the phone.
The Zune phone would have to be touch screen, something Microsoft should also have put into the Zune media player itself - the amount of rumors that fly off before each Apple event about a touch screen iPod are proof enough of the market for that. Maybe the second generation Zune will do that. By then, we probably might have that touch screen iPod!
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