"As more and more people have more than one of those devices, then the cross-device scenarios become more important," he explains. "Undoubtedly it is something you will see us do at some point in the not-too-distant future."

Belfiore also acknowledges the importance of the phone as part of a portable device strategy but is evasive on the subject of whether a Zune phone or a Zune-like Windows Mobile component is in the works. "We don't have any announcements about what we are doing on the phone at this point in time," he says. "We're excited about the progress we've made with Zune and stay tuned."

When asked to compare the third-generation Zune software to Apple's new iPod and iTunes offerings, the Microsoft official is complimentary to the "nice hardware engineering" of iPods but still believes the Zune system is "very competitive" with what Apple offers. The two companies both have recommendation engines for existing and purchasable tracks, but Microsoft's Zune Card sync feature (introduced in the earlier 2.5 software update) and Zune Pass subscription music allow users to collect recommendations from friends or to auto-download tracks, neither of which are currently available through Apple's platform.