A hot chick with a cute name from Microsoft said on Tuesday that it’s “not unreasonable” for the company to sell a mobile phone with the features of a Zune built in to compete with Apple’s iPhone.  In light of Apple’s relative success with the iPhone, there may be a huge market for phones with integrated mobile media players, but that doesn’t necessarily mean a Zune based device would be a success. To date, the Zune hasn’t had anything resembling the success of the iPod, so there’s no reason to assume it would be a strong selling point for other devices.

So far Microsoft’s mobile phone business has revolved around convincing handset manufacturers to use their Windows Mobile software, but that focus may be changing.  “It wouldn’t be unreasonable to think at some point there might some integrated thing,” Mindy Mount, chief financial officer of Microsoft’s entertainment and devices division, told investors at Citigroup’s global technology conference.

Earlier this year CEO Steve Ballmer stated that they would never try to create a Zune phone. He did, however suggest that similar functionality might be added to the Windows Mobile platform.

Microsoft have official dropped the price of the Zune from $249 to $199 in hopes of stirring up some sales against the mighty iPod.  With the announcement from Apple coming tomorrow, I’m not sure a quick $50 off the price will do to much at the moment, but whatever, $50 off means you can buy some decent headphones or quite a nice pile of songs.

On Wednesday morning Apple is expected to announce the latest iPod.  Being characteristically mum in advance of the announcement, the invitation sent to the media dogs last week didn’t give much away, however, it did show a silhouette holding an iPod.   The invite was in the style of Apple’s “Cover Flow” iTunes and iPhone browsing feature. “The beat goes on,” it said.Apple’s announcement will have implications for Microsoft, which last year launched its Zune music player in an effort to compete with the iPod.   Apple sill dominates the portable music market, and Microsoft’s previous efforts to compete, in alliance with its hardware partners, weren’t effective. The Zune is the company’s own device.

So far, Microsoft has come out with a 30-gigabyte Zune player. The company’s executives have said they will need to expand the product line to include smaller and cheaper, flash-based Zune models to better compete with the iPod lineup in general, and with the popular iPod Nano in particular.

“Certainly if Microsoft has any hopes for Zune, they are going to have to refresh that product before the holidays,” said Michael Gartenberg, a Jupiter Research analyst. “They are going to have to do it in a very meaningful way and it’s going to require a major revamp of that product line.”  Launching the first Zune model last year, Microsoft executives said they didn’t expect to be able to overcome the iPod’s advantage in the short run. Data from the NPD Group show Zune in the No. 2 position in the specific niche of hard-drive based players, and that spot may be the most realistic position for the company for the time being.

The Zune’s primary differentiator is a wireless song-swapping feature, but it requires other Zune users to be in the vicinity — something that’s not common, given the low market penetration.

To be sure, all is not perfect for Apple in digital media. Last week, its deal for NBC television shows on the iTunes Store unraveled.   But Microsoft still has a long way to go to catch up. In July, Microsoft’s Robbie Bach, president of the company’s Entertainment & Devices Division, reiterated that it would be three or four years before Microsoft gets where it wants to be in the portable music market.

“You are going to see more from us in terms of new software, in terms of new devices, in terms of new features,” Bach told analysts during a meeting on the company’s Redmond campus. “You’ll see us broaden our presence in the marketplace for sure going forward.”