Zune HD2 Speculated for Announcement Alongside Windows Phone 7

It was previously reported that Microsoft was looking to hire someone to work on a next-generation Zune release, and now Mary J. Foley of ZDNet has received an insider tip saying that the next-generation Zune will be more than just a rumor. The devices will be available in 16, 32, and 64 GB sizes and that we may hear of an announcement alongside Microsoft’s Windows Phone 7 launch this October.

An updated Zune music and media player makes sense considering that Microsoft had ported much of the Zune system into Windows Phone 7 and the Zune hardware is getting old now. There’s no indication whether the next-generation Zune release will be something akin to the iPod Touch–a Windows Phone 7 device sans phone features–or if it will be an integrated gaming device with Xbox integration or a hybrid of both.