During an interview with Germany's Frankfurter Allgemeine Zeitung, Chairman Bill Gates revealed that Microsoft will not launch a product that competes directly with Apple's iPhone: "No, we won't do that. In the so-called smart phone business we will concentrate solely on software with our Windows Mobile program. 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." Most people won't be surprised at this tidbit, but those following Zune Phone rumours are probably quite disappointed. I agree with this move; Microsoft has to perfect the Zune mp3 player before starting another hardware project.
News source: Reuters