Ever since Apple dropped the iPhone on an unsuspecting world, the assumption has been that Microsoft would combine a mobile phone with its own portable media player – the Zune – and create a rival device. Rumours started properly bubbling away back in November when CNBC suggested that the Zune may be melded with technology from the Sidekick – which Microsoft had recently acquired.

Now the splendidly named Trip Chowdhry, an analyst at Global Equities Research, says that he believes Microsoft’s Steve Balmer will unveil the new handset at the Consumer Electronics Show (CES) in Las Vegas, on January 7th.

Chowdry believes that the device will have a similar form factor to the Sidekick (e.g. a slide-out keyboard and landscaped screen) with other enhancements such as a motion sensor.

The expectations are far from universal, however. Gizmodo’s Brian Lam has heard first hand from Brian Seitz, Group Manager of Zune, that there’ll be “No Zune phone at CES.”

That’s pretty conclusive, but still leaves the way clear for Zune-branded software to be unveiled, possibly running on top of existing Windows Mobile handsets. Whatever is unveiled, we’ll bring you news of it first. Steve Balmer is due to give the first keynote address of CES on Wednesday 7th January. We’ll be on the front row, so you’ll read all the announcements here.

TBC | £TBC | Microsoft (via Wired.com)

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