After months of denials, Microsoft is now saying that it is "not unreasonable" for the company to introduce a mobile phone combined with features of its Zune music player.

Earlier this year, Chief Executive Steve Ballmer told a CEO forum Microsoft would never pursue a Zune phone. But he then said it could easily add music or gaming functionality to its Windows Mobile platform.

It appears that Microsoft is considering releasing an integrated phone and Windows Mobile platform. Rather than targeting the iPhone market, it is looking towards corporate customers.

Mindy Mount, chief financial officer of Microsoft's entertainment and devices division, told investors at Citigroup's global technology conference that it wouldn't be unreasonable to think at some point there might "some integrated thing".

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