Apple and Motorola have a "great relationship" - and Apple will build a smart phone one day.

Motorola CEO Ed Zander stressed the close nature of the companies speaking to CNet yesterday. He was speaking in response to remarks that were "taken completely out of context", in which he said "screw the nano".

"I've known Apple CEO 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," Zander said.

He also fanned rumour's flames with the remark: "And we know that they are going to build a smart phone - it's only a matter of time."

Zander also appealed for a non-proprietary approach to digital rights management technologies, the report said.