Mac OS X Lite on the "rumored" Apple phone?

Appleinsider is reporting that Apple "has been developing an operating system based on the core technologies of Mac OS X for use with embedded devices." Interesting as many tech folks believe full operating systems like Vista would be on mobile devices around 2010. Seems like Apple might beat everyone else to the punch. And if they could incorporate their software into the deal- wow! I'm really interested in the Apple phone now. Still we will have to see.