Rumors that Microsoft was about to release a ZunePhone at the Consumer Electronics Show in January have been quashed.

A spokesman said that Microsoft will have shedloads of stuff to show at in January, but a rumored ZunePhone won't be one of them. The delightfully understated Microsoft CEO, Steve Ballmer, will be talking about Windows 7 rather than releasing any new ZunePhone.

Microsoft wants to have Windows 7 ready for the holiday 2009 shopping season, so that means this CES is Ballmer's best stage to tout its benefits. Ballmer is expected to talk about how Windows is moving beyond the PC and into a world of PC, Web and phone.

The only 'phony' thing that Steve will whisper about is how he is giving phone makers a Chinese burn until they develop phones based on Windows Mobile. He might also mention developing Windows Live services for phones running a variety of operating systems.