Microsoft's new lineup of Zune digital media players will be made by contract manufacturer Flextronics International instead of Japan's Toshiba, which made the first Zune.
J Allard, a Microsoft corporate vice president, said on Tuesday in an interview with Reuters that the company opted to go with Toshiba's 30-gigabyte player last year because it needed to rush to market with its first product.
This year, it decided to bring all the design in-house and selected Flextronics for the manufacturing.
"To build this product, we really needed to think about it end-to-end," said Allard, who runs the Zune business. "It also brings with it cost advantages."
Microsoft said it will start selling three new Zune models in mid-November. The 4-gigabyte, 8-gigabyte and 80-gigabyte Zunes will all come with a new feature that allows a user to wirelessly and automatically sync media via a WiFi network from a PC to the Zune when its battery is charging.
The Wall Street Journal reports that Microsoft revamped its family of Zune digital-music players and software, in an attempt to compete more seriously with Apple's iPod this holiday season.
The new Zune products are smaller than their predecessors, have better screens for watching video and include new features, such as one that will let users wirelessly synchronize the devices with music on a personal computer.
But the devices, don't appear to offer any radical breakthroughs that suggest an imminent threat to Apple's thriving iPod business, which accounts for more than 70% of digital-music players sold in the U.S.