Microsoft Tries Again with Zune 2.0

As the days grow shorter and the leaves begin to turn, a season of contest begins anew. No, sports fans, we’re not talking about football, but a battle for the top of American consumers’ holiday wishlists.

Microsoft yesterday made its newest play for dominance in the portable media player market, announcing the next generation of its Zune player as well as updated software for the devices, a refurbished online music store and Zune Social, an online community. The news comes less than a month after market leader Apple updated its lineup of iPods and after a summer of iPhone hype.


Microsoft’s latest Zune play.

Source: Microsoft

The company updated the year-old Zune brand with three new models. There’s a black Zune 80GB hard-drive model, thinner than the previous 30GB edition and sporting a slightly larger 3.2-inch screen. That model will retail for an estimated $249.99. There are also new 4GB and 8GB products planned to sell for approximately $149.99 and $199.99, respectively. The two smaller-capacity units are both based on Flash memory, and are available in pink, green, black and glossy red, according to a statement.

All three new Zune models feature a touch-sensitive, iPod-clickwheel-like surface called a Zune Pad, which users can flick to move through lists of songs and albums or to fast-forward through picture slide shows and videos.

Each of the Zune devices also includes an FM tuner and wireless features upgraded from the earlier edition of the product. Zunes will now automatically sync with user PCs over home wireless networks when docked, plugged in to charge, or manually initiated.

Microsoft also extended the Zune’s capacity for wireless music sharing; users can now share and re-share songs with other Zune users, without expiration dates. Shared songs are still limited to a maximum of three plays before they’re unusable.

Zune software also now supports automatic importing of broadcast content recorded through Windows Media Center.

Perhaps learning a lesson from the beating Apple took from early adopters after it cut iPhone by $200, Microsoft said that all previous-generation Zune 30GB devices will be automatically updated with new features and new device software design this fall.

The news also includes the launch of Zune Social, an online community Web site. The site, which is in beta at present, enables users to create profiles — called Zune Cards — that automatically update to show the music they’re listening to on their Zune or with Zune software. Other members can play samples from these songs and go to the Zune Marketplace to buy them. The effort is similar to a handful of existing projects, such as the third-party iLike application on social network giant Facebook.

Zune Social members can also comment on each other’s profiles as well as message other members directly.

Microsoft also spruced up its Zune Marketplace for yesterday’s announcement, boosting its inventory to three million songs, adding music videos, 1,000 video and audio podcasts, and — continuing a recent trend among online music retailers — making one million MP3s available without copy-blocking digital rights management software.

The Marketplace revamp also includes a new search feature, which now adds video results to the mix, along with songs already in a user’s library.

Finally, Microsoft announced eight new Zune accessories available this fall, including a Zune Home AV Pack, Dock Pack, Car Pack, Cable Pack, premium headphones, leather case, Sync Cable and AC Adapter.

Gartner analyst Van Baker is impressed with Microsoft’s
update. He told the addition of Flash memory
models were “much needed” and increasing the Zune’s storage
capacity to 80GB was “very necessary.” Baker also said Zune Social
is probably a good idea, given how social music consumption is on and
offline already.

But don’t expect the Zune to put a dent in Apple’s iPod sales, Baker
said. Microsoft will likely increase its market share this holiday
season, but at the expense of other iPod alternatives, such as devices
from SanDisk and Toshiba.

As for Apple, Baker said, “maybe next year.”

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