So far as I can tell, that chatter started with a bunch of bloggers, who commented on Nokia and Microsoft's failure to use the word "Zune" during a recent press conference, and gained speed when Mary Jo Foley decided to drill into the topic. "I was worried Microsoft might have decided to pull the plug on its Zune music/movie/TV service," she wrote in a Feb. 15 posting. "Microsoft has shown not all its bets, even those that come to market, are long-term ones."
A Microsoft spokesperson apparently told Foley: "We're not 'killing' any of the Zune services/features in any way." They accompanied that with the usual boilerplate about remaining "committed" to the service, which appears on Xbox Live, Windows and Windows Phone 7.
Paul Thurrott, in a Feb. 12 posting on his Supersite for Windows, theorizes that Microsoft will preserve Zune's features while phasing out the brand itself, rolling "various Zune services into Windows Live."
Whether Microsoft indeed rebrands Zune (i.e., pasting it over with a giant Windows Live or Xbox logo), I think it's unlikely the company will phase out any of its media-hub services. Even if the actual Zune devices never managed to dent the iPod's market share, the Zune platform boasts a solid user interface. Why burn the money and time reinventing it?
That being said, the actual Zune player has been dead for some time. You can still purchase a Zune HD from Amazon or Microsoft's online store, sure, but it's basically the same hardware the company debuted near the end of 2009. Microsoft's quiet refusal to upgrade the device, I think, says it all: from here on out, the focus is on Zune software on Windows Phone and, very possibly, the Xbox.
Which is sort of a pity, because I thought the Zune HD was a well-built device. Somewhere along the line, though, Microsoft stumbled in pushing the device to users. And now, with Android media players poised to hit the market in greater numbers, its chance at building a standalone "iPod Killer" may well have passed.