DigiTimes of Taiwan claims that the Xbox 360 models premiering the first half of 2007 will have internal HD DVD drives. This goes in the face of Microsoft policy, which has been to say the external HD DVD drive is the only option in the near future for HD DVD playback on the Xbox 360.
DigiTimes claims that they've talked to Taiwan's optical disc drive industry and found that these companies have been contracted to make internal HD DVD drives for the Xbox 360. This internal drive would also create ill will from early adopters, who expected the HD DVD drive to be only external so everyone was on the same playing field, instead of getting shafted by having a gimpy unit with a last-gen DVD drive inside.
But what if HD DVD isn't the winner? Will including the HD DVD drive internally be throwing Microsoft's weight into a possibly losing camp? Wasn't that partially the reason for not including the drive in the first place?