I thought that Zune and WP7S shared different hardware so the software were incompatible. Also, considering the unpopularity of the Zune I think it's a non-starter. Worse, MS trying to compete against its own partners may have them running to Google. IMHO, they should just come out with a game console that happens to make phone calls, like Sony is rumored to be doing.
I guess I should point out that when I mention Zune, I'm talking about ZuneHD and the changes it brought specifically.
The ZuneHD uses similar hardware as smartphones (Tegra is just ARM CPU paired with an nVidia GPU, with some extra dedicated hardware components). Its actually more robust than plenty of smartphones, but most smartphones are moving to similar setups. Tegra 2 should be the choice for plenty of smartphones and it is probably better than say the similar chipsets from other companies that will be using similar CPUs (which will be paired with different graphics processors, which everything I've seen indicates them being inferior to even Tegra 1). Since the wireless (cellular/wifi/bluetooth/etc) are done on separate chips, the other SoC's don't offer anything that Tegra doesn't/can't. The main factor being cost.
Funny thing, Google did exactly that, they have their own branded smartphone (Nexus). It did initially cause a bit of negativity, but Google hasn't done anything with it that they're not letting carriers do. We'll see if Microsoft takes a similar approach. They've already set hardware requirements for WP7S, so I don't see them deviating from it much, which means other companies should be able to offer everything that a Microsoft version of the phone does.
The Zune's OS and WP7S are really similar, and I believe are based off each other (ZuneHD uses an early stripped down WP7S, which helped in developing the latter).
You're right in that the Zune hasn't been a huge success, but considering that Apple owns that market, I don't think they've been really overly disappointed (Zune is 2nd in marketshare in DAPs now). As far as I can tell, it was actually started as a tool for Microsoft branching out into portable devices and software. I believe its actually done well financially (helped buoy the entertainment division when the Xbox was losing them a bunch of money). But as the Xbox has proven, Microsoft doesn't have a problem going with something that doesn't necessarily make them money directly, as it pays dividends in other areas.
Wow, really sorry to derail this thread.