Is Microsoft Zune about to be Kinned?

From zdnet.com:

Over the past few days, more and more Microsoft watchers are noticing that Microsoft execs seem to be making a deliberate effort to avoid using the Z (Zune) word. That avoidance has set off a wave of speculation.

A spokesperson responded to my question late in the day of February 14:
“We’re not ‘killing’ any of the Zune services/features in any way. Microsoft remains committed to providing a great music and video experience from Zune on platforms such as Xbox LIVE, Windows-based PCs, Zune devices and Windows Phone 7, as well as integration with Bing and MSN.”

Windows Supersite blogger Paul Thurrott’s rebranding theory is sounding more and more plausible. But I’m thinking that Microsoft may opt to rebrand Zune as “Xbox entertainment,” rather than anything to do with Windows Live. After all, the Zune service already is available on the Xbox. And the rumored Zune HD2 — supposedly a device meant to compete with the iPod Touch — easily could be positioned and marketed as a portable gaming device.

Some veteran Microsoft heavy-hitters are moving to the Xbox division, as I’ve blogged recently, and are seemingly working on some kind of services-focused project. And the Zune team — which Microsoft split and reorged (twice) — is already in the Interactive Entertainment Business division, which is the home of the Xbox. Maybe the Zune service will end up as part of the evolving Microsoft IPTV strategy?