Microsoft has begun seeking manufacturing partners to make an internal HD DVD drive for a redesigned Xbox 360 console, whistle-blowers from among Taiwan's optical disk drive production community have claimed. And the software giant may be looking at incorporating disc-burning technology in the console.

It has to be said, of course, that Microsoft has yet to ship its Xbox 360-oriented external HD DVD player, and it may well have simply been looking for further manufacturing partners for the internal workings of this add-on.

But the Taiwanese source, mentioned by DigiTimes, specifically referred to that products read-only capability, and emphasis that suggests Microsoft may have a broader plan for a drive built into the Xbox 360 console.

Certainly, the timing's good. Sony's PS3 woes - which culminated in last week's announcement that the next-generation, Blu-ray Disc-supporting console will not ship in Europe until March 2007, delayed from this coming November - gives Microsoft the opportunity to take advantage of PS3 supply limitations.

And since an external drive is always going to appear a very clumsy alternative to the PS3's integrated unit, Microsoft has to be thinking about moving quickly to an internal unit.

The sources suggest the second-generation Xbox 360 could ship during the first half of 2007. By then, Microsoft's Zune will be available, backed by a online content shop that's going to be selling movies pretty darn soon, if not from day one. Apple's announcement yesterday will be one spur.

A good proportion of movie purchasers are going to want to archive their downloads, and that means DVDR/RW support at the very least. The tightly controlled software environment will make piracy a darn sight harder, a point that Microsoft will undoubtedly tout when pitching the Zune/Xbox 360 service to content owners.