Yet another Zune Phone rumor has been loosed thanks to a story posted at jkOnTheRun.  According to their anonymous source, Microsoft has been having meetings to discuss a Zune Phone designed to help the company do battle with Apple’s iPhone.  The Zune Phone would be powered by a specialized version of Windows Mobile 7 and include a lot of functionality powered by Windows Live services (why wait for the Zune Phone, MS?!).

We suppose a ZunePhone is possible, but shouldn’t Microsoft focus on making Windows Mobile 7 a modern, worthy competitor to Apple’s iPhone OS before they go hardware crazy?