Microsoft wants to take a more hands on role in the production of the next version of its Zune media player and is building a factory in China to manage the device’s manufacture more closely, Dow Jones (via Easybourse) reports. Zune’s next iteration will be marketed with varying prices and degrees of storage capacity and there has been speculation that the device will be thinner and offer smaller-capacity Flash-based players as well, similar to the iPod nano. The first Zune, released last November, was manufactured by Toshiba. Aside from cost savings by bringing production more in-house, Microsoft feels the move will give it greater flexibility and control by creating a device from scratch. The company has not named its production partner at the new factory, though Dow Jones notes that the factory is located in the same city as another plant operated by Flextronics, which produces Microsoft’s Xbox video game console. Microsoft is also not disclosing the costs and timetable associated with the new factory. The company expects to have devices from the facility available sometime in the fall. And while Microsoft projects sales of more than 1 million Zune players by the end of the company’s fiscal year in June, Apple shipped 10.5 million iPods in the March quarter alone.
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