There’re rumours Microsoft may turn to Zune to carve a new path in the smartphone market, while Windows Mobile languishes and the iPhone, BlackBerry and Android battle for smartphone supremacy.

According to IT consulting firm IDC, the worldwide market for mobile phone will grow 11.3% in the fourth quarter of 2009 after shipments shrank in the five previous quarters. In Canada, advanced networking, wireless Bell and Telus launched last year and helped increase demand for smartphones, especially on the iPhone.

On the Microsoft side the buzz involves a potential Zune smart phone, because the latest update has a driver package that points to a phone.

Designed to compete Apple Inc.’s iPod, Microsoft’s Zune first appeared in late 2006, but has failed to live up to its promise. While the iPod has evolved into the iPod touch and iPhone, Microsoft has been slow to take advantage of the Zune, with devices that differ only by the size and storage capacity.

We will likely hear more news next month on the Zune mobile strategy at the Mobile World Congress in San Francisco or at the CTIA conference in Las Vegas in March.

there we have question then becomes whether or not Microsoft will bail on Windows Mobile and put all their efforts on the Zune phone directly to the head to head competition with the iPhone and Android? Unlikely, unless you get traction, especially on the side of application development.