Microsoft launches Zune with wireless connection

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Adding in its prolonged attempts to compete with the market-dominating iPod through an array of partners, the most successful and influential software company, Microsoft Corp. on Thursday released its new "Zune" portable media player.

With the launch, the software giant hopes to win over consumers from Apple's market-leading iPod through Zune’s ability to share music wirelessly. Apple's iPod users do not yet have wireless connectivity, however analysts assert it will soon get equipped with this feature.

Microsoft said it will roll out a 30 GB (gigabyte) Zune and an iTunes challenger called the Zune Marketplace in the Christmas holiday season.

In spite of Zune’s late entry, five years after market leading iPod, a string of added features makes it head-to-head competitor against Apple. For instance, Zune’s built-in FM radio receiver and wireless capabilities that allow Zune users to "beam" songs to one another, differentiate it from iPod. Zune users can play the beamed song three times in three days and then must buy it on their own if they want to keep it beamed on their Zune, but Apple's iPods lack such features.

Another potential feature of Zune, which distinguishes it from iPod, is its song subscription pricing. Zune Marketplace will provide users with the option to either buy a flat-fee subscription to download an endless number of songs, or buy songs in an individual manner. This feature is not offered by the iTunes Store so far. However, the price for those downloads has not yet been fixed.

Calling music player the first step in creating a whole brand of portable devices, J Allard, a Microsoft vice president of design and development who is in charge of the Zune line of products said, “There are billions of people on planet earth who listen to music and (Apple's) sold 50 million gadgets. So we're in this early phase of digital music and portable entertainment," adding that “We believe in connection. We're launching a product with a very simple idea. We're putting Wi-Fi in everything we do."

Redmond, Washington-based company is also planning for a Zune mobile phone.

The new rectangular shaped player is similar in appearance to the iPod, with a round click wheel but a larger 3-inch (7.6 cm) liquid crystal display (LCD) screen. The device will allow users to share sample tracks, homemade recordings, playlists or pictures between devices.

According to the market analysts, the wireless feature, for now available only in Zune and not in the iPod, will nonetheless lure some customers but beating the global leader iPod is not an easy task.

As per the research company NPD’s estimates, the iPod holds over half of the digital media player market, and iTunes accounts for over 70 per cent of US digital music sales. In US, the iPod has more than 75 per cent of the digital music player market, NPD informed.

For getting hold of the market, "Microsoft has to stay relevant to how people are accessing information and entertainment. The desktop is not the center of the world anymore," said Toan Tran, an analyst at Morningstar.

Microsoft has said it intends to invest hundreds of millions of dollars to develop and advertise the Zune, while admitting that the investment may take years to gain profit out of that.

Microsoft shares jumped 35 cents, or 1.4 %, to close at $26.33 on the NASDAQ, while Apple shares tumbled 3 cents to $74.17 in yesterday’s trading.