Microsoft has sold a million Zune players and it plans to introduce the second generation in time for the holiday season.
It also looks like Redmond will expand the Zune line-up and introduce new players of different shapes and sizes. It is quite possible that these are in fact the long rumoured flash based Zunes, counterparts to Apple's iPod Shuffle and iPod Nano. Of course, this has yet to be confirmed.
Some sources on the net speculate that a new Shuffle killer is in the works. According to these rumours, the device is a tiny and innovative SD card based player. If true, this would probably allow Microsoft to ship a bunch of really cheap and upgradeable players. This might be a perfect holiday gift for cheap people.
According to Microsoft the new Zunes will retain WiFi and FM radio.