Amidst reports of massive lay-offs at Microsoft was this little nugget--Zune sales apparently declined by $100 million in the fourth quarter of 2008 alone. Microsoft couldn't say for sure what caused the downturn (well, the economy and the iPod might be to blame), but device sales (and overall Zune-related sales) have gone down by more than 50% over the last year.
These numbers certainly lend credence to the reports that Microsoft is ready to bail on the device in order to focus on making software for other MP3 players. [Engadget]
