Is Microsoft Going to Release a PDA?

In an interview last month,  Microsoft President and CEO Steve Ballmer brought up the possibility that his company might make its own handhelds and smartphones. Recently, some industry analysts made some predictions on when this will happen.

A report by The Diffusion Group predicts that Microsoft will come out with a gaming-oriented handheld late next year, or possible in early 2008.

It isn't clear from this report whether this is pure speculation or if it is based on insider information. It also isn't clear what capabilities this supposed device will have.

The analysts' report raises the possibility that Microsoft might license its Xbox technology to another company develop a mobile device. However, it seems the Redmond-based technology giant is also considering introducing such a device itself.

In addition, while The Diffusion Group's analysis talks about this mobile device as a competitor for the Playstation Portable and Nintendo DS, Ballmer's comments suggest that this handheld might offer the traditional PDA functions, too.