Motorola CEO fuels Apple cell phone rumors

At a leadership seminar last Friday, Zander discredited the iPod nano, saying: "Screw the Nano. What the hell does the nano do? Who listens to 1,000 songs?"

But in an interview with CNet News.com on Thursday, Zander said his comments were "taken completely out of context."

"We have a great relationship with Apple," Zander said. "I've known Steve Jobs for 15 years. Sure, there is some tension there. We have the ROKR, and they have the nano. They are a competitor as well as a partner."

Not to be denied another headline, Zander was quick to add: "And we know that they are going to build a smart phone— it's only a matter of time."

Zander on Thursday also demonstrated an "unnamed prototype device" that can receive and play music videos, according to News.com.

"The device flawlessly played a Gloria Estefan video but would not shut off. Zander tried to silence the wayward device by unsuccessfully attempting to remove the battery. He finally called an offstage assistant for help."