While Bach didn't disclose any details or timeframe for the future of Zune, as you can see from the slide below, these are the paths Zune will follow in Fiscal Year 2008 (started this July): 

Robbie Bach explained he believes these are priorities of the Connected Entertainment generally. Particularly talking about Zune he said Microsoft has achieved the expectation for 1 million Zunes (actually 1.2 Million) and has the 10-12% of the sales in the hard disk part of the music players market.

Of course he said Microsoft expects results from Zune in 3-4 years from today and waits loss of profits in the Entertainment department in Fiscal Year 2008 as well, containing Zune and Mediaroom. But they will continue to invest on it.

Unfortunately Bach didn't add anything more about the future of Zune except for describing the marketplace broadening. Zune will leave the "hardcore music space" it is today enter a broader music space. This may mean that in summer 2008 at the BBQ events (if existing) you may not find hiphop artists but maybe Madonna :) We'll find out.

Bach also announced Marketplace of Zune will expand and include Video. More work in Zune community  should also be expected.

You can find more information in the Agenda of the Financial Meeting .
Watch Robbie Bach's webcast or download the presentation .