It looks like Apple might have an answer to the low cost of the Zune HD. John Gruber of Daring Fireball is alleging a new price structure for the next generation of iPod touches that could seriously stick it to Microsoft. He expects a 16 GB touch for $199, and a 32 GB touch for $299.
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That alone is going to be hard for the Zune HD to match, but Gruber doesn't believe that's all Apple has up their sleeves. He thinks that a 64 GB iPod touch is on the way, marked to hit at the $399 price point. There's been no confirmation of a 64 GB touch, but Apple has increased the capacity of their touches regularly over the last two generations. We may not have proof of this rumor, but we do have substantial evidence of precedence.
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If Apple ends up putting out their next generation of touches at these price points, Microsoft could be in trouble. The Zune HD looks like a great player, but it loses a huge edge if it is set at an equal price with the touch. We won't know until September if these rumors are going to bear fruit, but right now it seems fairly likely. Could this herald another price drop for the Zune HD? Or does it just mean that Microsoft's new player is going to have to stand against the touch based on merit, and not cost?