Edible Apple

The International Business Times reports that Microsoft is poised to launch some sort of Zune-esque smartphone in 2010 to better compete with Apple’s increasingly dominant iPhone. But much like Google’s strategy with the Nexus One, Microsoft won’t be manufacturing their own hardware, and will instead work closely with a third-party like HTC to put out a Microsoft branded smartphone.

The project aims to produce a phone that will extend Microsoft’s reach of Windows Mobile operating system, as well as adding new software capabilities.

“We believe the phone will be based on WindowsMobile7, which has not yet been made generally available,” according to analyst Katherine Egbert of Jefferies.

Egbert believes the device would also likely include Microsoft’s new Windows Marketplace for Mobile, a store for cellphone downloads along the lines of Apple’s App Store.

While Microsoft has publicly sworn off any notions that it would enter the smartphone business, the recent hype surrounding the release of the Google Nexus One underscores the importance of working extremely closely with handset manufacturers, to the extent that you slap your own logo on there. Microsoft’s mobile strategy is falling apart at the seams, and reports of a Windows Mobile 7 delay seem to be running on an endless loop. If Microsoft wants to get back in the game, a branded Microsoft smartphone might be its only hope.

In the meantime, Android continues to build momentum and if Microsoft doesn’t come up with a compelling Windows Mobile experience soon, it may be relegated to a piece of nerd trivia before you can say ‘developers.’