Today Robbie Bach president of the Entertainment and Devices division for Microsoft stated that there will be no ZunePhone stating “We don't make phones ourselves. We don't have any plans to make phones ourselves.”

He did say that the Zune will eventually have a touch screen “Take the device independent for a second and just assume that over time where there's a screen, touch will be part of it. It's not going to matter what the product line is. You're going to see it be a cornerstone of the work we do.” So it seems that touch will become standard on Zunes when this happens.

Paraphrased from ACE's post on ZuneBoards