Rumors that Microsoft has been planning to launch its own
smart phone have been swirling for several months now, as industry watchers and
gossip mongers try to figure out exactly what the company’s “Project Pink” is
all about.Zune HD_low rez  

Now Jefferies analyst Katherine Egbert is weighing in. Citing “industry
checks,” Egbert predicts Mister Softy will roll out a Zune-like phone with 720p
video capability and a a 5 MP or higher camera. More surprisingly, she expects
an announcement within the next two months – either at the Mobile World
Congress in mid-Feb. or the CTIA show in March.

The phone, she speculates, will be based on the as-yet
unreleased Windows Mobile 7 operating system. It will support the Zune video
store and music subscription service, along existing Microsoft partners,
including Facebook, Twitter and Xbox Live.

Microsoft, it's worth noting, has denied plans for a Zune phone for the better part of the past year. 

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