Crunchgear has a scoop from a source that confirms the first generation Zune is an OEMed Toshiba Gigabeat, combined with some added on features and functionality made just for Microsoft. Microsoft had to contract Toshiba to build this first unit so they could rush the player out in time for Christmas 2006, probably before the next generation iPods are due.

After this first model, Microsoft is going to handle all production in-house, making add-on players to the Zune line in the iPod Nano/iPod Shuffle fashion. Also, coming somewhere down the line is a high-end Zune that supports gaming, video and music. – Jason Chen

Confirmed: Zune is Toshiba... For Now [Crunchgear]

Contact information for this author is not available.