Microsoft reiterates no Zune phone in the pipeline

Microsoft will focus its mobile investments on its Windows Mobile operating system as well as gaming and entertainment services tied to its Zune portable media player, but will not pursue a combined hardware/software platform a la rival Apple's iPhone, CEO Steve Ballmer reiterated during the software giant's annual "Strategic Update" analyst call Tuesday. According to ZDNet, mobile is one of seven key areas "where we invest serious money," Ballmer said, adding that in the year ahead, Microsoft plans to engage in careful cash management, to maintain "right-size enterprise overhead" and to earmark roughly 2 percent of its spending for research and incubation projects.

In addition, Ballmer told analysts Microsoft will not release its new Windows Mobile 7.0 OS until 2010--in the meantime, the stopgap WinMo 6.5 will see the light this fall. To meet its mobile goals, Microsoft is presently dedicating 2,000 staffers and spending $900 million a year, approximately 4 percent of its operating budget. Ballmer described the Windows Mobile unit as "somewhat unprofitable."

For more on the Ballmer call:
- read this Brighthand article

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