Looks like Microsoft is once again denying anything about a Zune phone. Quoting a Microsoft spokesperson: "we have no plans to create a Zune phone," which seems pretty open and shut.

Then again ... Assuming there is something in the works, it's not like they would confirm either.  And as NeoWin points out, they also denied ever making an MP3 player, too.

With the rumors flying high this week, especially with the USB reference codes found in the .inf file from the latest Zune software update, Microsoft is probably feeling some heat from their OEMs over the issue--don't forget, they are also very interested in the prospect/denial of such a device.  We can understand if they are nervous and causing some little waves with Redmond.

Regarding that Zune update, consensus seems to be swaying from an actual "Zune phone" to "these are plans to incorporate the Zune experience into Windows Mobile,"

Check out Paul Thurrott's piece over at WinSuperSite, which delves deeper into that issue as well as detailing the recent changes to the Zune software, it's a good read.

Oh Mobile World Congress, you can't come soon enough.  Please rescue us from ourselves.

[via NeoWin.net]