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Microsoft confirmed rumors today that it would be releasing the Zune HD later this year. Sizes and prices are yet to be announced however we do have some confirmed specs.

• U.S. Only
• HD Radio Tuner
• OLED Touch Screen
• Based on Windows CE
• Internet Explorer Based Browser
• Flash Memory

Quoting CNET

The software maker also said that at next week’s E3 trade show in Los Angeles it will announce details on a new Zune-branded video service for the Xbox that will replace the current Xbox Live marketplace for TV and movies. The company didn’t announce details or specifically say that content will be playable on both Zunes and the Xbox.

Currently videos purchased via the Xbox can’t be played on a Zune, although both stores use a similar back-end infrastructure to serve up content. Over time, Stephenson said the goal is to move toward a world in which content purchased once can be played on a variety of devices.

Microsoft plans to offer the new Zune video service in a number of European markets, in addition to North America.

The Zune HD having a HD radio will give it a competitive avantage in the market.

Quoting CNET

Microsoft plans to continue selling its hard drive-based model, which will have a software QWERTY keyboard, but said it plans to eventually discontinue its other flash models in favor of the Zune HD.

Stay tuned for more info to come…

[via CNET]