In an interview this week as CES, Bill Gates stated that Microsoft will not be launching a device to compete with Apple's iPhone. Many have speculated that Microsoft would jump intothe music phone market just as it jumped into the music player market with the Zine to compete with the iPod.
“In the so-called smart phone business we will concentrate solely on software with our Windows Mobile Program.” – Bill Gates
It bees like Microsoft will be focusing all its efforst to create the operating system many of us have come to love(and hate). If the preview we saw of windows Mobile 7 is any indication of the direction Microsoft is taking, I'd expect the HTC phones of the future will pack a lot more punching power to take on whatever Apple has planned for their iPhone2.