Microsoft cut the price of its struggling Zune digital music device by $50 Sept. 4, the day before Apple's expected unveiling of new iPods. It a blog posting at ZuneInsider, the company said the drop to $200 is "part of the normal product lifecycle, something we've had on the books for months." The company also says that for those who have bought a Zune, customer satisfaction is around 94% positive.

Meanwhile, rumors of a Zune mobile phone kicked back into high gear after Mindy Mount, CFO of Microsoft's entertainment and devices division told attendees at a technology conference that such a move "wouldn't be unreasonable." Of course Microsoft said the Zune would have a mobile phone presence on one form or another when it first launched the initiative.