First recommendation is definitely to alter the formfactor of the next Karma. That's not to say make it the same as the iPod, but refine what was started with the first version. Toss the scroll wheel. These things are too promlematic on every device they're used in. Let's try to lessen the number of intricate mechanical UI components.

Keep the shape dock-friendly. In fact, make it more 3rd-party accessory friendly by losing the irregular contour. Definitely keep a docking connector on the bottom. Make sure it supports the following if it doesn't already: power, remote-control (duplicating all device buttons and more if possible), USB, ethernet, audio output - and that through the USB lines (likely) information that is relevant to the playlist(s) and playing tracks can easily be communicated. Third-party friendliness goes a long way to mass-market adoption.

Offer more than one storage size option. Choice is good. Having only a single size is more of a deterent than you might think. And enough reason to go shopping for a competing product.

Ramp production to be able to meet demand. Having items sell faster than you can get them on the shelves does not necessarily mean you have a hit on your hands, but it does mean you definitely have a production or supply problem.

An obvious one is not to over nor under-price the product. If it's as good as the iPod (as an example), then people will expct to pay a similar price. Too sharp a discount and it brings up questions of quality.

Don't validate the competition in your retail marketing materials or advertisements. Everyone knows the iPod. You don't have to ever mention Apple or their product in any media materials for public consumption. That's only a sure-fire way to stay in second place. Let the product stand on its own merits.

Do make bold statements about the performance, quality and versatility of the product. Make them in places the average consumer (note: NOT the average techy) will notice. Do make sure the product is available where a large percentage of normal people shop (Best Buy alone won't cut it).

And those are just simple recommendations. I would not be surprised if we saw a color iPod soon - whether it does any kind of video is anyone's guess though.

Bruno