Citing unnamed sources within the company, Neowin claims the Zune HD will sport a 3.6-inch multi touch OLED display and an HDMI connection on the side to stream content directly to TVs. Nvidia’s Tegra graphics chip for mobile devices will be powering the new Zune, which will come in 4GB, 8GB, 16GB, 32GB, and 120GB versions. Other features include an HD Radio, support for wireless connectivity and a web browser.
The Zune platform is also being completely overhauled and further unconfirmed rumors suggest the updated device would even support “3D Xbox Games,” but it is unclear what form this will take – perhaps XBLA titles? We’ll have to wait for an official announcement, but if rumors hold true, Microsoft could have a much more competitive device in its hands this time around.