There would seem to be two main scenarios--the rumored ZunePhone, or just making Zune software for Windows Mobile or other phone operating systems. A magazine interview with CEO Steve Ballmer suggests that Microsoft at least plans the latter approach.
Asked why the Zune is important to Microsoft, Ballmer told that it was about more than just the device itself.
"Now, we built the Zune hardware with the Zune software--and what you'll see more and more over time is that the Zune software will also be ported to and be more important not just with the hardware but on the PC, on Windows Mobile devices, etc.," Ballmer said.
Asked for clarification, a Microsoft representative provided the following statement.
"We've always said that software and services is a key focal point for Zune and it does make sense to extend the Zune experience to other devices," the representative said. "In terms of specific timing we have nothing to announce at the moment."
Source:→ CNET News