While on track to selling half a million Zune digital media players by the end of 2006, Microsoft is also laboring on expanding the device's capabilities. In this context, the Redmond Company will not only launch additional Zune devices introducing new form factors and unique features but will additionally update the existing media players. The upcoming software updates are designed to add functionality to the existing Zune devices.

The software upgrades are scheduled for availability come 2007. But there is an exception. In fact, the first software update for Zune is expected to be made available before Christmas. The update will serve mainly to add support for Windows Vista as the operating system is scheduled for general availability on January 30, 2007.

The Zune software update will additionally include various minor improvements, resolve some functionality issues and even improve performance. Microsoft informed that the company won't deliver major new features in the first update.

"It is plumbing stuff, but it is stuff customers will notice and appreciate," said Jason Reindorp, marketing director for Zune at Microsoft. "It's not going to be a whole new wireless scenario or anything like that."

But this doesn't mean that Microsoft won't introduce major capabilities expansions over time. "We'll do more things," Chairman Bill Gates promised. "But, you know, we're vague and mysterious about what that is. I mean, but we're not just going to do media; we'll do more."

Market analysts consider that the Redmond Company still has to introduce major tuning in some areas of Zune such as podcast and video content support. Moreover, Zune's existing capabilities have to be expanded.