The rumored handheld is reported to be “unlike anything on the market today … think of a mashup of the Sony Mylo, the PSP, and the iPhone… errr, the iPod touch; [the MS handheld] doesn’t need access to a phone network. Although the Microsoft handheld is definitely a converged device, this is not a Zune Phone. Microsoft won’t compete with its Windows Mobile customers.”

The device will supposedly be based off of Live Anywhere, for the most part. “There will be a single online marketplace; the lines between the Zune, Xbox Live and Sky marketplaces will blur when the handheld launches.”