Microsoft has entrenched itself against the largest brand name in electronics history and to compete they will need to introduce the Zune touch to compete with the apple counterpart. The key technology for a touch controlled Zune is an electric capacitance widecreen touch zune.
Early reports indicate the zune team will skip a Zune branded phone in favor of Windows mobile content integration. That means the touch Zune will establish itself in the market segment against the leading large screen audio device.
Some possible sizes for the zunetouch would be 16 and 32 gb of storage. Regardless of the form factor, some key features are likely to arrive from Microsoft in the first iteration.