J Allard in an interview on Reuters says that Zune 2, unlike Zune 1 which was almost like the Toshiba Giagabeat, is constructed by Flextronics. Flextronics is the same company which makes the Xbox. In a few words Microsoft chose to take the situation in its hands and redesign Zune 2...
From Reuters UK :
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.
EDIT: The Full interview of J Allard on Reuters
Links:
Zune 2: Microsoft Press Release
Related articles:
ZuneSocial.net and Marketplace changes
Microsoft Zune 2.0 Official Press Release
Zune 2 and Accessories Complete Specs
More Official Microsoft Zune 2 Photos
The First Real Zune 2 Photos!
Microsoft to construct Zune 2.0 versions
Zune 2 Factory in China Confirmed