If Microsoft launches a Zune-branded phone, it might hurt sales of its Windows Mobile platform products, according to a story in DigiTimes Telecom.

The story reasoned that a Zune phone, which Microsoft said is part of the Zune brand's futurre, will play MP3s similar to phones that run on the Windows operating system platform.

The source of the speculation stems from Taiwan handset makers, which now manufacture more than 90 percent of Windows Mobile-based PDA phones and smartphones in use worldwide.

I think the Zune phone is less a threat to Windows phones and more a threat to those handset manufacturers. That's because, as the story goes on to say, handset makers believe Microsoft should license its Zune-based platform to them to produce Zune products.

Otherwise, I don't see how Zune would compete with Windows-based phones, at least not right now. Windows Mobile phones -- in large part -- are sold to business people, who want to be able to read e-mail on the go. They are not typically sold in mass quantities to consumers, many of whomy would consider the high-end phones out of their price range.

On the other hand, a Zune phone would be most likely a consumer-focused product and more readily compete with phones such as Verizon Wireless' Chocolate.