This isn’t really the place to discuss MP3 players so … adios.
One idea I’ve thrown around a lot for something to sell is a framework for a larger-size feature-rich hand-held audio player, that the end user would complete as a kit-build as he/she wants. An enclosure, linear circuitry (amps, audio controls, etc), a display, control interface (buttons, thumbwheels, etc), base it all on maybe a traditional CPU in parallel with an FPGA. End-user would provide storage medium (memory card slots, miniature hard drive, etc), power source, and all software/firmware (with the help of open-source projects), and could design and add optional things like wireless networking and recording. The reason for doing a partial product is “high-tech” things like this are so clogged up with patents and intellectual crap that it makes it all but impossible for a tiny-scale operation like what I had in mind to be doable. This would avoid patent junk at, of course, the expense of offering an incomplete product.