Microsoft will not be building a Zune phone to rival Apple's iPhone device. That's what Microsoft CEO Steve Ballmer hinted at when he spoke at USA Today's CEO Forum across the water.

Rumours of a Zune phone being in the pipeline to combat the Apple iPhone are widespread. Earlier in the year, reports said that the so-called Zune Phone would not be running Windows Mobile. Instead it would have a newly developed operating system able to sync with the Xbox 360 and the online Zune Marketplace .

But this is totally untrue according to Ballmer. He said that Microsoft is totally committed to developing the Windows Mobile platform and any Zune phone functionality would be incorporated into it. There are no plans to build separate Zune phone hardware, he said.

"It's not a concept you'll ever get from us. We're in the Windows Mobile business. We can put Zune into Windows Mobile, we can put Xbox into Windows Mobile. We can pour everything in," Ballmer told journalists.

"We wouldn't define our phone experience just by music. A phone is really a general-purpose device. You want it to make telephone calls. You want to get and receive messages - text, e-mail, whatever your preference is.

"You may want music, you may want to play games, you may want to carry your contacts with you, and you may want to pay for things. I think we have to think about the phone, instead of as a fixed-function device, a phone is really kind of a general purpose device that we need to have clean and easy to use. "

Zune phone a no show

This would indicate that, like Google , Microsoft is not developing plans to develop an actual phone. If Ballmer is to be believed, the company is instead intending to advance the Windows Mobile platform which will then continue to run on handsets built by other companies.

Of course it's possible that Ballmer is not being completely honest about this. Microsoft has after all filed many patents in the last year that combine to strongly suggest a Zune phone is being designed.

It could be that while Microsoft develops the Windows Mobile platform with Zune and Xbox connectivity, handset manufacturers might simultaneously build new phones designed especially for that purpose. The Zune phone concept is not dead in the water yet.