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Saw over Ars Technica that Bloomberg is reporting that Microsoft will cease development of its family of Zune-branded music players due to weak demand and a desire to focus on its smartphone platform.



Zune will live on as a software and services platform, according to Bloomberg's source. Windows Phone 7 embeds the Zune player for media playback on the phone, uses the Zune Marketplace for online music sales, and the Zune PC software for media syncing and firmware updates. These uses will be unhindered by the cancellation of the standalone Zune hardware.
  Zune hardware apparently dead, software and services live on