Microsoft has introduced three new models of its Zune
digital media player that wirelessly and automatically update their music,
photos and videos when placed near a user's computer.
They mark the second generation of Microsoft's answer to Apple's iPod, which has sold more than 100 million units in various
shapes and sizes since its 2001 launch.
By comparison, Microsoft joined the fray last year with a single
30-gigabyte Zune model and has sold 1.2 million units.
The new Zunes will come in 4-gigabyte, 8-gigabyte and 80-gigabyte
models. All will come with a feature that allows a user to automatically sync
media via a WiFi network from a PC to the Zune when its battery is charging.
Microsoft also aims to tap the social-networking phenomenon with
Zune Social, a Web site for users to display music they like, share playlists
and find friends with similar tastes.
The new devices, set to go on sale in mid-November, are equipped
with a circular navigational pad that allows a user to both "flick" through
options like on a touch screen or "click" through choices.
The 4-GB model will go on sale at $149, the 8-GB Zune will cost
$199 and the 80-GB model will sell for $249. Those prices are the same as
similar-sized iPods.
Analysts said the next-generation Zunes are necessary to keep
existing users happy, though the new devices are not enough to close the gap on
Apple.
"I don't see Microsoft gaining market share on Apple, but it may
gain share against the other also-rans," said Van Baker, analyst at research
firm Gartner, noting SanDisk and Creative Technology may be vulnerable.
In the second quarter, Apple had 81.3 percent of the digital media
player market by dollar volume, according to NPD Group. SanDisk was second at
5.8 percent while Microsoft had 4.4 percent.
"The market share thing is the easy thing to discuss and write
about, but it's such a bad measure," said J Allard, a Microsoft corporate vice
president in charge of the Zune business. "Talk to me in six or seven years
about market share. Talk to me this year about the experience we are
creating."
Microsoft's top brass plans to provide Zune with a three- to
four-year window to gain the necessary scale and reach to become a legitimate
rival to Apple. The company has also said it does not expect Zune to post a
profit in the short term.
"We are very committed to this space. There is a lot we can do,"
Bill Gates, Microsoft's co-founder and chairman, told reporters at a briefing
about the new Zune line-up.
Mr. Gates said ceding an early lead to rivals and closing the gap over
time was a recurring theme in his company's history, whether it was productivity
software or PC operating systems.
"We think the same kind of thing in terms of persistence and
innovation can apply in this connected entertainment area," Mr. Gates said.
New Zunes will automatically import TV shows recorded to
Microsoft's Windows Media Center, built into most new Windows Vista operating
systems. Zune Marketplace, a digital music store, only sells music videos and
offers video podcasts free.
Microsoft said it would add more than 1 million MP3 songs free of
digital rights management onto Marketplace, declining to identify music labels
it planned to work with on that.
The company completely redesigned software that runs on the Zune
and linked PC to make it easier to navigate and search for new music. It also
brought the player's design in-house, using contract manufacturer Flextronics
International instead of Toshiba, which
made the first Zune.