Yes there is a new Zune in the works. There are many rumors that it will be a Microsoft Zune HD Model. Those rumors are unconfirmed at this moment though. The new Zune is rumored to combine features of the Zune and Xbox. Cool, ain’t it. Well yeah. The new Zune device has been confirmed for arrival by Microsoft.
What the device is is still a matter of speculation. On whether this phone is Microsoft’s answer to the iPhone, all you get is a denial from Microsoft. Some people think that it will be a touch enabled media player with gaming abilities. So that seems more likely…a fusion of the Xbox and Zune. Something that blurs the boundaries between a media player and a gaming device.
Since the new device is a bridge between two platforms, it has been internally codenamed xYz. The graphical interface will be similar to the new Xbox Experience. Theoretically the user could buy a song, game or movie on his Xbox to play the content on the handheld afterwards as do the opposite.
Rumor mills seem to say that the hardware features on this device are not there on any handheld in the market. Previous rumors suggested the device would have an Nvidia Tegra chip. It seem to be a device that can compete with Apple, Sony and Nintendo at the same time. Hope E3 throws up further leads next month.