Zune phone to be a Nokia?

Microsoft make the Windows Mobile operating system. Nokia recently purchased symbian. Yet this report seems to believe that Microsoft and Nokia will work together on taking the iPhone down a  peg or two with a Zune phone. I’ve quoted the article after the break:

Nokia is currently working with the Zune team on integration of Zune Marketplace content according to a well placed source within Microsoft. The joint development is directed at content delivery rather than a hardware device according to the source. It has long been assumed by many tech followers that Zune content and software would find it’s way onto Windows Mobile devices, thereby offering competition to the unfortunately popular iPhone. The interesting thing about the Nokia Zune partnership is that Nokia does not support Windows Mobile. It appears Microsoft may be developing a two front war against the iPhone, namely Windows based smart phones and more abundant "non-smart" phones.
The source denied any knowledge of Zune phone hardware development, as he has in the past, stating "if there is a zune phone I don’t know about it". He also indicated the Nokia deal would not be exclusive. Regarding development and production timelines for Nokia/Zune Marketplace integration the source claimed "it’s too soon to say".
The broad picture that appears to be emerging is the future expansion of Zune content over multiple devices such as phones, PC’s, XBOX’s, and of course the Zune product line itself.

Thanks to Zunescene but way of Pocket PC Thoughts.