Microsoft dropped the price of its struggling Zune digital media player last night, ahead of a pre-announced iPod launch that takes place this evening. Apple is expected to introduce a clean sweep of iPod models that could render the Zune even more outmoded than it is already.

However, Microsoft says the Zune price cut of $50 (£25) - from $249 (£124) to $199 (£99) - is entirely coincidental:

"It's part of the normal product lifecycle, something we've had on the books for months," a Microsoft spokesman told the Zune Insider blog.

"We just got some research back and customer satisfaction with the 30GB device is really high (around 94 per cent). We expect even more consumers will now want to discover the Zune experience at the new lower price."

Zune Phone latest

Microsoft is also looking to create a combined digital media player/ mobile phone combo to emulate the early success of the iPhone. Rumours of a Zune phone have circulated the web since the launch of Microsoft's digital music player last year, according to Reuters. It quotes Mindy Mount, chief financial officer at Microsoft's entertainment and devices division, who told Citigroup investors:

"It wouldn't be unreasonable to think at some point there might some integrated thing." However Microsoft CEO Steve Ballmer has already dismissed the idea. He believes it would be easier to simply add music and movie functionality to the Windows Mobile operating system that is used in some smartphones.

Live at the Apple iPod event

Tonight's Apple event - labelled The Beat Goes On - will be broadcast to UK journalists at the BBC Television Centre, starting at 6pm BST. We'll be there, reporting live from the event so keep checking the Tech.co.uk homepage for updates.