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Microsoft Confirms 'Zune' iTunes, iPod Rival
July 24, 2006

Microsoft has confirmed the badly kept secret that it is planning to challenge Apple by developing a series of digital music and video players.

Microsoft said it would introduce a "family of hardware and software products" under the Zune name by the end of 2006 to challenge Apple's iPod and iTunes, reports the Telegraph (U.K.). "We see a great opportunity to bring together technology and community to allow consumers to explore and discover music together," Chris Stephenson, general manager of marketing at Microsoft, is quoted as saying.

The company is in talks with Hollywood execs to license movies and TV shows for use with its device. Microsoft hopes Zune will drive growth, as iPod has for Apple. Meanwhile, Apple itself has plans, which probably include an iPod phone, according to the article.

The iPod has more than 75 percent of the digital music player market in the U.S. (and more than 50 percent worldwide), writes Reuters, citing research company NPD. iTunes accounts for over 70 percent of U.S. digital music sales.

Microsoft Planning Ahead For the Holidays with Zune

Microsoft is rumored to launch 'Zune', a music/media/game player on November 14th. Zune should have a 30GB drive, black, brown, and cotton color options, with a duotone approach on each, FM tuner, 13 first party accessories available at launch, and a 50% larger screen than the iPod with video.

Microsoft Zune 30GB will cost USD 399. For the same amount of money Apple sells iPod 60GB, whereas iPod 30GB costs USD 299. Microsoft, however, believes that customers will be eager to pay more for its Zune player because it has broader feature-set, including ad-hoc music sharing between a group of people in the range of the device as well as digital radio.

The menu options of the player will include 'Music', 'Video', 'Pictures', 'Community', 'Extras' and 'Settings'. It is unknown, whether the device will be able to play games, as there is no such option in the menu, but it is known that the initial target group for Zune will be the existing Xbox customers.