After three years and untold millions spent on the line, Microsoft's hopes of cutting into iPod's big lead are now on the Zune HD, with its 3.3-inch multitouch screen, streaming-music feature, and the ability to playback video, with the help of an HDTV, in 720p. A 16GB Zune HD is available at retailers for US$219.99 and a 32GB will cost US$289.99.
But at this point in Zune's evolution there's plenty of skepticism that the Zune can close the gap on Apple. A Zune-iPod comparison has for too long resembled a late-round prize fight, the kind where the challenger is cut, swollen-eyed and wobbly legged but refuses to go to the canvas. Zune sales are falling, a top manager has moved on and what's perhaps most worrisome is that the category is becoming passe.
While Apple also tries to kick-start lackluster iPod sales--upgrading Nanos with such features as a video camera and voice recording--CEO Steve Jobs has steered consumer interest away from straight digital music players and into smartphones. Apple has sold more than 30 million iPhones over the past two years and seen more than 1.8 billion iPhone applications downloaded.
Nonetheless, this is still Microsoft, one of the biggest technology companies in the world and well known for its patience.
"You can make the argument this is Microsoft's first real shot to getting it right," said Stephen Baker, vice president of industry analysis for The NPD Group. "Remember, the bar doesn't have to be set all that high for them to be successful. Nobody is supposed to unseat iPod... and Microsoft now has a product that they seem to be more confident in."
That confidence may come in part from an upgrade that some have called the best Zune yet.
Zune HD features a new OLED (organic light emitting diode) screen and will send high-def video to a HDTV using a new Zune AV dock, sold separately.
"Consumers can buy or rent HD content from the Zune Marketplace," Microsoft said in a statement, "sync that content to a Zune HD and take it with them to play back on a large screen HD TV in the home or on the road."
The 16GB is available in black and the 32GB is available in "platinum" at retail locations. Customers can purchase Zune in red, green, or blue in both capacities from Zuneoriginals.net.
Zune HD will also play games, HD Radio, and offers music-recommendation software, called Smart DJ.