Reuters reports: “Microsoft Corp. said on Tuesday that it is “not unreasonable” for the company to introduce a mobile phone combined with features of its Zune digital music player to compete with Apple Inc.’s iPhone. The Zune phone, a topic of speculation for months since Microsoft introduced its first digital music player last year, could be driven by consumer demand for one multimedia device to make phone calls, play music and take pictures.”

“To date, the focus of Microsoft’s mobile phone business has been providing its Windows Mobile software to handset manufacturers, but the company said an integrated business model of making both device and software could make sense. Microsoft has sent mixed signals about the Zune phone. At the time it introduced the Zune last year, the company said a Zune phone was definitely part of its future plans.”

“Mount declined to comment on rumors that Microsoft may buy BlackBerry-maker Research in Motion Ltd., but said the company is happy with its future in mobile right now. Microsoft has been focused on building scale by rolling out Windows Mobile to as many different devices and operators as possible while RIM, according to Mount, has been focused on being profitable with its limited number of handsets.”