via gizmodo
Not that this would be the first time an exec was caught lying through his teeth about future products, but for the time being Ballmer is sticking to the idea their won't be a Zune phone coming from Microsoft.
Interestingly enough, he does say that they could toss Zune (And Xbox) functionality into Windows Mobile. Sneaky, Sneaky. I guess they'll just let the phone manufacturers assume the risk, while reaping the rewards.
