Speaking with analysts at the Consumer Electronics Show (CES) in Las Vegas, Robbie Bach, Microsoft's president of its entertainment and devices division, said of Apple's fabled "iPhone": "If it's great as a music player, then it's just another iPod trying to be a phone." He noted that Microsoft considered integrating cell phone capability into the Zune but decided against it.

"It's probably on the table of things for us to look at, but not the number one thing we are focused on," Mr. Bach said of the possibility of a "ZunePhone." So far, the Zune has struggled to compete against the iPod since its launch in November. Microsoft hopes to sell over one million units by June -- in contrast, Apple has exceeded eight million iPods sold during each of its past four quarters, with over 14 million of them sold during the fourth quarter of 2005.

Speculation has been rampant that Apple CEO Steve Jobs will introduce an iTunes-enabled cell phone, with even the venerable Wall Street Journal citing "people familiar with the situation" as saying that it will happen, with Cingular as the carrier, leading Mr. Bach to comment: "The latest rumor we hear is that it is going to be a MVNO phone and there hasn't been a lot of successes in that MVNO space for a lot of different reasons."

He added: "Historically, working with partners hasn't been a strong point for Apple, so maybe it will find a way to work around those relationships."

Mr. Bach's comments came via the Vietnamese publication Thanh Nien Daily.