Microsoft reportedly said it will discontinue making the Zune hardware. It launched in 2006 with the intent to prevent Apple from cannibalizing the music players market share completely. It didn't succeed, but a lot of good things came out of it. Zune HD has a pretty svelte looking design, and, most important, the Zune software is top-notch. The Zune Marketplace for Xbox 360 was probably a precursor of the app store we have now on WP7 devices.
It is exactly that strong point that Microsoft plans to emphasize on from here onwards. We already wrote that the Zune multimedia management software might receive the name, or be tied with a new cloud-based service Microsoft is working on, called Ventura.
The Redmond software giant is turning attention towards mobile for the Zune software completely, and will focus its research on applying it to smartphones. We already have a pretty compelling example in Windows Phone 7, and we are glad to hear that Microsoft ditches the dead-end music player hardware market to focus on the smartphone media software development exclusively.
As for current Zune owners, Microsoft's source said "we remain committed to supporting our devices in North America".
source: Bloomberg via Mashable