Well, you can officially consider them crushed. The Big M has issued a categorical statement, telling Engadget that, "Microsoft is not going into the phone hardware business. Microsoft is not building a Zune-specific phone."
This comes after insiders at US network Verizon said they'd got word of plans for a Microsoft mobile to rival the iPhone. It was said to pack a full touchscreen, that slick new OS and feature Windows Marketplace. Just a shame that it's a load of bunkum.
Verizon has been at the centre of the gadget rumour pile up this week, after employees claimed they were set to get a new iPhone lite on launch this June.
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