UPDATED: Shoulda stuck with our instincts. Fake. (via Engadget)

ORIGINAL: When we first heard that a Twitter account associated with Microsoft Office 10: The Movie (?!) was telling people "New product launch, that's all I'm allowed to say. Hold off from buying an iPhone/Pre", we figured it had to be fake. It was posted from iPhone/Mac client Tweetie, after all!

When we found out it was real, however, well... we didn't know what to think. Lucky for us George Ponder from sibling site WMExperts has us covered:

The iPhone and the Pre are obviously smartphones, so it's tempting to put the Zune Phone back into the rumor mix. Us, though, we're remembering how strenuously Microsoft has denied rumors of being in the hardware business and of the Zune Phone specifically. So whatever it is, we're not expecting a 180 on this one (but a 360, or more specifically something to do with Xbox 360, doesn't seem crazy).

Xbox 360 is inarguably the only hardware and consumer electronics brand from Microsoft enjoying anything resembling brand success at the moment, so even we've been up on the idea of an XboxPhone. However, if past behavior is any indicator of future behavior, Microsoft will be releasing Premium Zune Services for Windows Phone Mobile Experiences Live! 7 sometime this summer, and iPhone owners likely won't notice...