Microsoft want to add Zune features to Windows Mobile - HTC Source
It seems as though Microsoft is starting to catch on and realizing that people want an all-in-one device. Reportedly, Microsoft is pondering the idea of integrating some of the Zune features into Windows Mobile (the operating system which powers a whole lot of smart phones) and allow the devices to work together. Mel Sampat, program manager for Microsoft wrote ""I’m certainly not hinting or speculating about a converged device. I’m wondering if there are any opportunities for us to improve the experience for people who use both devices. For example, viewing your Zune Social network in Internet Explorer Mobile, converting a Zune playlist into .WMA ringtones, [or] converting Zune’s artwork to Windows Mobile themes."
Personally I don’t see why Microsoft wants to be in the media player business when they already have a comanding lead over Apple in the smart phone arena. The Zune is thought to already be running on a version of Windows CE so it would not be hard at all to simply replace Windows Media player with the Zune’s software. There are a lot of factors that go into choosing the right hardware to make a good media player, but if Microsoft Launched a third version of windows mobile (they could call it WMM for Windows Mobile Media) they would be able to control things a bit more and give the public what they really want.
Zune on Windows Mobile devices!
You can read the Microsoft blog here