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:
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.