Despite more public indications from Microsoft that it is actually working on a reference specification for its partners to build MP3 devices based on Windows Media technology, to take on Apple's iPod, BetaNews is reporting this morning it has a source inside the company who says Microsoft has been working for some time on at least two physical prototypes, and may be preparing a launch announcement for October.
The entire initiative falls under the name "Project Argo," and insiders believe Microsoft is working on at least two portable players. Zune, which first surfaced in June, is believed to be the iPod-like device that would include wireless connectivity in a design very reminiscent of the Apple iPod.
BetaNews' information could lend some credence to the theory that Microsoft's development of its upcoming Live Anywhere service, which it announced last May during E3 Expo, may be a principal cause for the consumer delay of Windows Vista. Live Anywhere could be the service which BetaNews' source refers to as "Alexandria."