Microsoft is slowly developing a second generation HDD-based Zune and the long-rumoured flash-based Zune. The latter will be Microsoft's attempt to take on the iPod Nano, seeing as it is Apple's most successful mp3 player. It is expected to have maximum storage capacities of at least 8GB, although a 16GB model is quite possible with fast-dropping NAND flash prices. The second generation HDD-based Zune will be both smaller and lighter than the Toshiba-sourced first generation model. It will be built from-the-ground-up with Microsoft playing a major role in the design. "There are definitely some cost efficiencies, but the more important thing from our perspective is the flexibility and control we have in creating a device from scratch and making it down to the last component what we want it to be," said Jason Reindorp, marketing director for the Zune.
News source: DailyTech