Microsoft boss Steve Ballmer might’ve rubbished rumours of a Zune Phone, but the tittle-tattle just won’t die. Now we hear it’s in development, code-named ‘Pink’.

According to CNBC’s Jim Goldman, a reporter with not-inconsiderable clout in the tech community, a “good source” has told him Microsoft is “ready to give a major facelift to the company’s Zune music player that could mean its evolution into a new smart phone from the company.”

Sounds logical enough, but Goldman has more inside info. He reckons Microsoft’s purchase of Danger, manufacturer of Sidekick phones, is directly related and the firm will combine technology from the existing Zune and Danger’s phones to create a genuine iPhone challenger.

So is this the real deal? We’d be extremely surprised if Microsoft wasn’t working on its own phone prototypes. After all, why else did it buy Danger? But that’s not the same as having a product that’s ready for release.

Goldman himself states that while some sources are telling him the Zune Phone will be unveiled at CES in January, its worldwide shipment could be a year away.

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TBC | TBC | Microsoft (via CNBC)

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