Steve Ballmer, speaking to Wall Street analysts at a Redmond strategic update, has stated that Microsoft is not going to be building its own phone in the foreseeable future.

"It's not our strategy to build our own phone," he said. "It's our strategy to sell software that we can use with a wide range of device manufacturers to encourage choice; both choice in the device and choice in the operators.

"We have a positive price on our [Windows Mobile] software and Google [with Android] does not. I don't know how it's a sustainable thing to not have a positive price, and don't tell me you think it's search, because even when they win the Android business they have to pay to have their search installed on that phone just as we do.

"That's a competitive bid that the operators mandate, so we are going with a real price with real investment with a professional price."

There is no Zune Phone

While there won't be many surprised that a Microsoft-built phone isn't coming to stores, with the exception of those that are convinced a Zune Phone is in the works to rival the iPhone, Microsoft will be looking to bring lower cost offerings to its stable of handset partners.

"Those in a position to benefit [from the credit crunch] are the guys with phones at a low price point," Ballmer added.

"It's an advantage we have, we have manufacturers with low price point phones in comparison to the iPhone particularly, which is a very high-price phone, may get subsidised down to lower prices.

"But the operators care a lot about what they get charged and I think you'll see a lot of low cost, low form factor mobile phones with Windows Mobile, and possibly also with Android as well."