From a headline that sounds like it’s from the Twilight Zone, Digital Daily reports there is rekindled speculation that we will soon see a Zune Phone on the horizon. Despite being late to the game, some experts believe that a Zune phone is in the cards for Microsoft. The phone is rumored to be running Windows Mobile 7 with iPhone-like functionality.

What does this mean to you?

The idea of a Zune phone is not really anything new. But this is the first time we have seen the rumor being fully explored by a Jefferies & Company analyst. I am inclined to agree with the speculation. Even if it does as poorly as the Nexus One, it only makes sense for Microsoft to make an attempt with a Zune phone given their desire to be taken seriously in the consumer mobile market.