Robert,
While I appreciate your answer, it just sounds like towing the company line. I was hoping for big things regarding the Zune player by Microsoft.
Why not marry some of the technology and design of the WP7 to a new Zune device since the WP7 took their look and feel from the Zune.
I don't think this will detract from your core mission of developing a phone, but enhance it. Some key improvements would be a larger screen/display, porting some apps to a Zune device, more capacitive touch features, dual gaming capabilities, more storage
(i.e. the 128 Gb) and longer battery life. Then market those things until people are sick of seeing them. As someone mentioned, MS is a software company and not a hardware company, so just partner with a hardware company as they did with a phone manufacturer.
I'm sure there is one available to develop such a device.
Apple hasn't given up on the iPod Touch and I don't think that MS should give up on the Zune.
The marketing for the WP7 is lackluster compared to that of Android devices and iPhones. If it weren't for Nokia, there would be no marketing presence at all.
Believe it or not, some people still desire just an Mp3 player and that could also be a target market for the Zune device. Those not willing to give up their precious iPhones or Droid devices, but want a separate music listening apparatus without having
to charge it every so often.
That's just my opinion, but consumer opinions matter.
Best