The Zune Phone rumor returns!

We've all heard the Zune Phone rumors--heck, we've even seen a parody ad of what the Zune Phone might look like. While the company has been playing it hot and cold during the past few months, it looks like Microsoft might have some sort of iPhone competitor on its roadmap after all. At this week's Citigroup technology conference in New York, Mindy Mount, corporate vice president and CFO of the Microsoft's entertainment and device division, said that it's not "unreasonable" to expect a photo and music-centric Windows Mobile device with a touchscreen in the near future. Users "tend to have one phone for personal as well as work [use]," Mount said. "Being able to do pictures and music is something that consumers are going to want, so it's a natural thing for us to want in our product roadmap."

In other Zune newz, Microsoft has officially dropped the price of the device to $199--paving the way for the Zune 2, which is heavily rumored to be making an appearance during the next few weeks. According to the good folks at CrunchGear, the new Zunes will ship with high-end earbuds that will be significantly more durable and better-sounding than the stock white earbuds handed out by the competition.

For more on the Zune Phone:
- see this PC World article

For more on the non-phone Zune:
- see this Engadget article on the price drop
- and this Gizmodo article on the earbuds