Well it seems microsoft really wants a piece of the handheld pie,no matter how much money they loose in process.

In the months to follow the launch of the Zune HD, Microsoft went dark in terms of discussing their plans for the future of the product. The outlook for the Zune HD looked brighter when the company introduced Windows Phone 7, which seemed to have to be based, in part, on the Zune HD's user interface, but again, Microsoft's avoided discussing how their portable media player will fit into their plans for the new mobile OS. Now, it seems that Microsoft may have been working on a Zune HD2 all along.

According to a job listing discovered by WMPoweruser, the team responsible for the original Zune HD is on the hunt for mechanical engineers for the "next generation of portable entertainment and communication devices." Though categorized as a position tied to the Windows Phone platform, the listing makes no mention of the cellular capabilities of the device.

Shortly after WMPowerUser's post, ZDNet published a rumor report of their own, citing an anonymous source in the know as saying that a Zune HD2 is in the works, with 16GB, 32GB, and 64GB variations. Their source also said that Steve Ballmer may detail the new portable when the first Microsoft Phone 7 devices become available next month.

Given the gaming focus of Windows Phone 7, it'd be reasonable to assume to that an update to the Zune HD would integrate processor upgrades and a strong emphasis on Xbox Live-enabled games, positioning the product as a direct challenger to the iPod touch.

Could there be merit to these claims? Only time will tell, but a Zune HD refresh seems likely. For all the latest on the Zune HD, stay tuned to IGN.com.

Source : IGN

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