Only days after Apple announced new iPods Microsoft has revealed its new wireless-enabled Zune digital music and video player that will go up against the iPod.

The player has a 30-gigabyte hard drive, comes in black, white and brown and allows users to wirelessly share music with nearby devices, the Redmond, Washington-based company said today in a statement.

Microsoft, the world’s largest software maker, is attempting to take some of Apple’s 77 percent share of the $4 billion market for digital music players. The company will have better luck taking share from its partners who make devices using Windows software and account for about 20 percent of the market, said Matt Rosoff, an analyst at Directions on Microsoft.

They won't make a dent in iPod immediately,'' said Rosoff, who saw the device in a Microsoft demonstration.The software is the big mystery. If it works like iTunes, that’s great, but if it’s broken, buggy or has a bad user interface, forget about it.”

The Zune Marketplace will let customers buy individual songs or pay for a Zune Pass subscription to download an unlimited number of songs for a flat fee. Apple’s iTunes sells both music and video.

Microsoft is touting Zune’s wireless connection as a way to let users discover new music and share songs. Customers will be able to send songs to nearby devices. Those songs will expire after three plays or three days, whichever comes first. Users will also be able to share sample tracks, playlists or photos.

The product has a 3-inch screen and built-in FM tuner.

Made by Toshiba

The initial version of Zune, the first music-player hardware designed by Microsoft, will be made byToshiba, Microsoft said last month. The price and availability date weren’t disclosed.

Share of Microsoft rose 41 cents to $26.39 at 12:50 p.m. New York time in Nasdaq Stock Market composite trading. They had declined less than 1 percent this year before today.

The player will come loaded with some music, including songs from bands such as Hot Chip, whose album “The Warning” was nominated for the U.K.’s Nationwide Mercury Prize. Participating record labels include EMI Group Plc’s Astralwerks Records and Virgin Records and Seattle’s Sub Pop Records.


Speculation about the player has been brewing for months. The company confirmed the project, with few details in July. Last month, some features leaked out in a U.S. Federal Communications Commission filing from Toshiba.

Microsoft will also have three accessory packs available for Zune at Christmas: a car pack, a home pack that links the device to TV and music speakers, and a travel pack.

Microsoft won’t use the wireless connection to let customers buy songs without being connected to a computer. The company decided it was too complicated for users, Rosoff said. He expects Microsoft to add that feature later.

Apple has sold more than 60 million players since releasing the iPod in October 2001. IPods and iTunes song and video downloads accounted for 45 percent of Apple’s $4.37 billion in sales in the quarter ended July 1, up from 38 percent a year ago.

Apple this week introduced a new version of its iTunes software, added movie downloads and cut the price on upgraded versions of its video-capable iPod. The company also introduced smaller, larger-capacity versions of its iPod Nano model.


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