Software giant Microsoft has warned its rival, Apple Inc., into launching its iPhone and said the much-awaited modern mobile phone could face some very serious challenges if the popular iPod MP3 player is integrated into it.

Robbie Bach, Microsoft's entertainment and devices division president admits the company is also planning to introduce its own mobile phone and integrate the Zune digital music player, but said such plan "is not at top of its priority list."

Bach said, "You have to find out what it's great at. Is it great as a phone, or is it great as a music player? If it's great as a music player, then it's just another iPod trying to be a phone." He said the biggest challenge facing Apple is merging the two different formats of media player and phone, as well as making sure the unit have sufficient battery life and good screen size.

AHN

Microsoft, Apple, iPhone