Microsoft Zune phone may hurt sales of Windows Mobile-based phones

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Daniel Shen, Taipei; Steve Shen, DigiTimes.com [Wednesday 20 September 2006]

Microsoft‘s plan to launch a Zune-branded phone might hurt sales of its Windows Mobile platform products since it may compete with Windows Mobile-based mobile devices, according to sources at Taiwan handset makers.
With Taiwan handset makers now manufacturing over 90% of Windows Mobile-based PDA phones and smartphones in use worldwide, Microsoft should consider licensing its Zune-based platform and related software to handset makers to produce Zune-based products in volume so as to effectively compete with Apple Computer, the sources stated.
Since Microsoft stated that a Zune phone is part of the future of its Zune-branded products, the software giant is likely to push through with the development of Zune phones, even at the expense of its Windows Mobile platform products, the sources contended.
Following the recent introduction of its Zune portable media player, Microsoft will definitely move into the multimedia phone segment, given that about 400-500 million units, or about 45% of global mobile phone shipments projected for 2006, will have MP3 functionality, the sources added.

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