Microsoft is reportedly set to launch a Zune Phone in a bid to regain some of its share of the smart phone market, where the growth of Apple's iPhone and handsets using the Google operating system Android has resulted in a reduction in the Windows mobile operating system's market share.

Some reckon the phone could be on show as soon as this month at the Mobile World Congress in Barcelona, though some of the speculation about the device comes from the word 'phone' appearing in an info file that comes with a recent driver update for the PC-based Zune service.

All this has led to speculation that the Zune platform might finally launch over here - Microsoft having never got round to expanding the actual Zune player and its iTunes-Store-style Zune market place into the European market. Whether non-phone Zune devices would then follow isn't clear.