The folks from Redmond are going to hold an event on Tuesday, October 2, 2007, to announce the next iteration of the Zune. Insider sources say that Microsoft chairman Bill Gates and design chief J Allard will be attending the said event to commemorate the announcement.

The new Zune would include the first flash memory-based gadget of the initial 2.4 million-unit product line, a strategy that Microsoft eyed significantly for the company. Microsoft currently holds a 10% share of the HDD player market and hopes to turn a profit from its share with the release of the flash-based Zune. 

The "Zune 2," as it's unofficially coined, is claimed to be similar in design, only thinner in profile. BetaNews reports that the new Zune will come in dimensions of 3 inches by 1.25 inches, and will look similar to the iPod nano. Video playback capability seems to be a feature confirmed for the next-generation Zune, though the claims of Wi-Fi inter-connectivity and larger in-house storage still remain unconfirmed.

While over two million units of new Zunes will be in production by the holiday season of 2007, about a third will take the form of the flash-memory based player. The first batch should be available by November, coupled with a Beta launch of a new Zune community site. There are also reports of first-party accessories for the product, though full details