With Windows Phone 7 offering full Zune functionality and then some, the new mobile OS has clearly created a surplus of lower-capacity Zune HD devices, causing Microsoft to respond with a rather significant price drop. Typically, a discount would indicate an imminent refresh, but we doubt that's the case here. The 16GB Zune HD has shaved off $30, to $169.99, and you can now grab the 32GB version for $199.99 -- the same price you would have paid for the 16 gig before the drop, and nearly $100 less than the $299 you'll spend on a 32GB iPod touch. The 64GB model is holding fast at $349.99, but with a $70 plunge on the mid-capacity model, you might have just enough cash left over for that tattoo you've always dreamed of.

[Thanks, Daniel]

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16GB Zune HD drops to $169, edging closer to EOL?