Why Microsoft won't make an iPhone

Has Bill Gates learned the lesson of Zune?

Having gone up against the iPod with Microsoft's (MSFT) MP3 player and failed to make much of a dent in Apple's (AAPL) dominant share of the portable digital music market, Gates seems to be conceding the field for all-in-one devices to the iPhone.

Thompson Financial reports today that in an interview with a German newspaper, Frankfurter Allgemeine Zeitung, Microsoft's chairman said he did not intend to make a combination cell phone/music player.

"No, we won't do that. In the sector of such smartphones, we are purely concentrating on the software with our programme Windows Mobile." (link)

That's a strategy that will put Microsoft in competition more with Google's Open Handset Alliance than with Apple's iPhone.Of course, licensing high-margin operating systems and application software, and letting others duke it out in the cut-throat hardware markets, is how Microsoft made its first billions.