Microsoft is apparently set to unveil a 'Zune phone' later this month, according to claims made on a Spanish blog.
The blog states that the new phone will be using an Nvidia Tegra chip, with the chip company teaming up with Microsoft to make the presentation.
MuyComputer is claiming that the phone will have 720p playback through a video output socket, and has seen 'indications' the device will run Windows Mobile 7.
While the former fact seems obvious, the latter seems a little more spurious given that the WM7 platform is not going to be here until the end of 2010 or even 2011.
Add to that the fact that Ballmer stated there would be no Zune phone (albeit a year ago) and you can see why the rumours might lack credence.
That said what could be happening is a phone that Microsoft helped design will showcase the Zune platform (which IS coming in Windows Mobile 7) could be confused as a standalone Zune handset.
Either way, we'll be there on the show floor to bring you all the news and hands on reviews of whatever Microsoft show off (if anything at all, that is).