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Zune Software May Be Coming To Phones

The multimedia software could be integrated into Windows Mobile and could help Microsoft fend off competitors like Apple, Research In Motion, and Nokia.

Microsoft (NSDQ: MSFT) may be close to bringing its Zune multimedia software to Windows Mobile smartphones.

The software maker is in the process of choosing an advertising agency to market a product code-named "Pink," according to a report from AdWeek. This code name is associated with bringing the Zune's multimedia software to other devices, and it's in line with the broad strategy CEO Steve Ballmer has outlined.

Representatives from Microsoft did not comment on the report, but the move could give Windows Mobile a much-needed boost. While the operating system still has more than 12% of the smartphone market, it's rapidly losing market share to rivals Symbian, Research In Motion (NSDQ: RIMM), and Apple's iPhone. Newcomers like the Google (NSDQ: GOOG)-backed Android and Palm's upcoming webOS also are expected to poach away customers from Microsoft's mobile platform.
One of the main reasons that Windows Mobile is becoming less compelling than its rivals is its multimedia capabilities. While most Windows Mobile devices are capable of playing audio and video files with Windows Media Player Mobile, the experience is not as smooth or as well-integrated as the iPhone's media capabilities. While the Zune hasn't come close to dethroning the iPod in the digital music player space, the last version's software and user experience were widely praised.

There has been widespread speculation that Microsoft would come out with its own Zune phone, and those rumors were kicked into overdrive with last year's acquisition of Sidekick-maker Danger. But the company would then be competing with its licensing partners like HTC, Samsung, and LG Electronics, and the most likely path is for Microsoft to integrate Zune software into its mobile platform.

It's still unclear when the Zune software would find its way into the mobile platform, as a software upgrade is expected in the second half of the year, and it's likely Microsoft would have touted this during the Windows Mobile 6.5 announcement. Any massive Zune synergy will probably wait until Windows Mobile 7, which is expected to be released in 2010.

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