Microsoft denies smartphone launch

Microsoft has denied planning a smartphone version of its Zune media player

Microsoft has officially denied an analyst report suggesting that it is planning a smartphone version of its Zune media player this spring.

A report by Rob Sanderson and Mark McKechnie at Broadpoint AmTech cited "multiple industry sources" stating that Microsoft will announce a hardware platform to rival Apple's iPhone, RIM's BlackBerry, Google's Android and Palm's Pre.

"We do not see this as landscape-changing, much like their Zune launch," the analysts wrote.

The announcement provoked a storm of online comment and rumours of a new move by Microsoft in the mobile and hardware sectors to coincide with the Mobile World Congress event in Barcelona later this month.

However, the company has quelled speculation, stating that "Microsoft is not doing a phone".

The report follows a prediction in November by Canaccord Adams analyst Peter Misek that Microsoft would be launching a handset in Barcelona. This prompted an official rebuttal from Scott Rockfeld, Microsoft's director of Windows Mobile.

Microsoft has traditionally relied on third-party manufacturers for its platforms, and has close ties with HTC, the fifth largest handset vendor in the world.

But the Zune player is struggling. Sales dropped 54 per cent in the past quarter, against huge successes for Apple.