Well, Microsoft’s job postings have led to numerous rumours in the past. Some of them turned out to be the truth, others were miss-interpreted. This time the Softies’ Entertainment and Devices Division needs a Hardware Engineer to build “the next generation of portable entertainment and communication devices”.
Now this could be anything, right? Of course that could, but now add that the team that’s recruiting is stating that they were behind the creation of the Zune HD.
The job posting is filed under the product ‘Windows Phone’, this makes things more complicated. It gives us three options:

1. Microsoft is building a next generation Zune based on Windows Phone 7
2. Microsoft is building a Microsoft-branded Windows Phone 7 device (unlikely)
3. We’re just hoping for the two above and all MS is doing is creating an internal Windows Phone prototype device

As a side-note, I’ll add that ZDNet’s Mary-Jo Foley — who’s mostly well informed — recently said she had gotten a tip about a Zune HD successor. According to her, Microsoft is considering to make one last Zune device before turning it into a service on multiple platforms. It could become a phone-less Windows Phone 7 device, much like the iPod touch is to the iPhone.

The tipsters goes even further and describes some major features:

• it’ll have the Natal-like gestures to be able to use the phone without touching it
• you won’t be able to upgrade to Windows Mobile 7, because the OS actually requires you to have better hardware (faster processor, more memory, etc)